US jobless claims near lowest since 1960s as employers hold onto workers

Hiring weak but layoffs minimal ahead of Fed rate decision

By LineZotpaper

Published22 October 2026

Updated22 October 2026

Read Time2 min

Sources2 outlets

Weekly jobless claims in the United States slipped to 194,000 for the week ending October 17, hovering near the lowest levels recorded since the 1960s, even as hiring remains tepid and the unemployment rate ticked up to 4.2 percent. The Labor Department data, released Thursday, shows that employers continue to hold onto workers despite an uncertain economic backdrop, with the four-week moving average falling to 197,750.

Initial filings for unemployment insurance fell to a seasonally adjusted 194,000, just off the 189,000 reported for the week of July 18, which was the lowest since September 1969. Claims have averaged 212,000 over the past year, and the latest figure marks another leg lower in what economists describe as a low-fire trend.

Thomas Simons, chief U.S. economist at Jefferies, said in a client note that 'despite extremely pessimistic views expressed in consumer confidence surveys regarding the economy overall, countless headlines describing job cuts from a variety of businesses, and the phantom job-stealing power of AI, the claims data suggests that labor market conditions are stable.'

The data comes during the reference week that the Bureau of Labor Statistics uses to calculate monthly payrolls growth. Nonfarm payrolls rose by just 29,000 in September, and have averaged a gain of only 69,000 a month in 2026. The unemployment rate rose to 4.2 percent, an increase largely attributed to a sharp spike in labor force participation.

Layoffs have remained modest, declining by 61,000 in August, according to BLS data. Over the prior 12 months, the layoff rate as a share of the total workforce fell to 1 percent, down 0.2 percentage point. Job openings were relatively flat during the period.

Federal Reserve officials are scheduled to gather next week to announce their latest interest rate decision. Policymakers have recently characterized the labor market as a source of general strength and have focused more attention on inflation, which remains well above the central bank's 2 percent target. Markets expect the Fed to hold off on a rate hike in October but to institute another quarter percentage point increase in December.

Analysis

Why This Matters

Low jobless claims suggest the labor market remains stable, even as hiring slows, providing reassurance to workers and policymakers.
The contrast between weak payrolls growth and near-record low layoffs highlights a tight labor market where employers are reluctant to let go of staff.
The data will inform the Federal Reserve's next moves on interest rates, with a potential December hike on the table as inflation persists.

Background

The US labor market has shown contradictory signals this year: layoffs are minimal, but hiring has decelerated sharply. The unemployment rate has edged up, largely driven by more people entering the workforce rather than job losses. The Federal Reserve has kept interest rates elevated to combat inflation, and its policy decisions are closely tied to labor market conditions. The upcoming jobs report for September, due on November 5, will provide further clarity.

Key Perspectives

Economists: Thomas Simons of Jefferies views the claims data as evidence of stable labor market conditions, countering negative sentiment in consumer surveys and media reports of job cuts. Federal Reserve: Policymakers see the labor market as generally strong and are more focused on inflation, which remains above the 2 percent target. They are expected to hold rates in October but hike in December. Workers and job seekers: While layoffs are rare, the weak pace of hiring makes it harder for those out of work or entering the labor force to find new jobs.

What to Watch

The September jobs report release on November 5 for a fuller picture of hiring and unemployment.
The Federal Reserve's decision next week and any shift in language regarding the labor market and inflation.
Whether jobless claims remain at or near historic lows in the coming weeks, and if hiring picks up or continues to stagnate.

Sources

Jobless claims near the lowest since the 1960s as low-fire trend continues · Economy
Jobless claims near the lowest since the 1960s as low-fire trend continues · US Top News and Analysis

Checked

12 claims in this story checked against 1 source: 10 supported.

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SupportedUS jobless claims are near their lowest levels since the 1960s as employers hold onto workers.Economy: “Employers continue to hold onto workers even as hiring remains weak, sending weekly jobless claims to around their lowest levels in records that stretch back nearly six decades.”
Partly supportedHiring is weak and layoffs are minimal ahead of the Fed’s rate decision.Economy: “Employers continue to hold onto workers even as hiring remains weak”
SupportedThomas Simons said in a client note that the claims data suggests labor market conditions are stable despite pessimistic consumer views, job-cut headlines and concerns about AI.Economy: ““Despite extremely pessimistic views expressed in consumer confidence surveys regarding the economy overall, countless headlines describing job cuts from a variety of businesses, and the phantom job-stealing power of AI, the claims data suggests that labor market conditions are stable,” Thomas Simons, chief U.S. economist at Jefferies, said in a client note.”
SupportedInitial filings fell to a seasonally adjusted 194,000 for the week ending October 17, as reported Thursday by the Labor Department.Economy: “Initial filings for unemployment insurance slipped to a seasonally adjusted 194,000 for the week ending Oct. 17, the Labor Department reported Thursday.”
SupportedClaims were near their lowest levels since the 1960s, just off 189,000 for the week of July 18, the lowest since September 1969.Economy: “That marked another leg lower in the low-fire trend, with the total just off the 189,000 reported for the week of July 18 that was the lowest since September 1969.”
SupportedClaims averaged 212,000 over the past year and the four-week moving average fell to 197,750.Economy: “Claims have averaged 212,000 over the past year, and the four-week moving average is down to 197,750.”
Partly supportedEconomists describe the trend as a “low-fire trend.”Economy: “That marked another leg lower in the low-fire trend”
SupportedNonfarm payrolls rose by 29,000 in September and averaged a gain of 69,000 a month in 2026.Economy: “Nonfarm payrolls rose by just 29,000 in September and have averaged a gain of just 69,000 a month in 2026.”
SupportedThe unemployment rate rose to 4.2 percent, largely because of a sharp increase in labor force participation.Economy: “The unemployment rate rose to 4.2%, an increase largely due to a sharp spike in labor force participation.”
SupportedLayoffs declined by 61,000 in August, according to BLS data; the layoff rate fell to 1 percent, down 0.2 percentage point over 12 months.Economy: “Layoffs have remained modest, declining by 61,000 in August, according to Bureau of Labor Statistics data released Sept. 29. Over the prior 12 months, the layoff rate measured as a share of the total workforce fell to 1%, down 0.2 percentage point during the period.”
SupportedJob openings were relatively flat during the period.Economy: “Job openings were relatively flat during the period.”
SupportedMarkets expect the Fed to hold off on a rate hike in October and raise rates by another quarter percentage point in December.Economy: “Markets expect the Fed to hold off on a rate hike in October but then to institute another quarter percentage point increase in December.”