Jobless Claims Edge Higher, But Layoffs Still Low by Historical Standards

More Americans filed for unemployment benefits last week, adding to signs the labor market is losing steam — though layoffs remain relatively low by long-term measures.

The Labor Department said Thursday that 235,000 people filed jobless claims for the week ending Aug. 16, up 11,000 from the prior week and a bit higher than economists expected. Continuing claims — the number of people already receiving benefits — rose to 1.97 million, the highest since late 2021.

For perspective, jobless claims have mostly stayed between 200,000 and 250,000 a week since the economy emerged from the pandemic, a range still considered healthy. But recent numbers suggest the once red-hot labor market is cooling.

Last month’s jobs report showed employers added just 73,000 jobs in July, well short of forecasts. On top of that, revisions to May and June cut another 258,000 jobs from earlier estimates, and the unemployment rate ticked up to 4.2%.

Economists say the slowdown is showing up in other ways, too. Job openings slipped to 7.4 million in June, down from 7.7 million the month before, and fewer workers are quitting voluntarily — a sign they’re less confident about finding something better.

Meanwhile, high-profile companies from Google and Meta to Starbucks, Intel, and Disney have announced layoffs this year.

President Donald Trump’s trade policies — particularly his shifting tariff strategy — are also weighing on hiring, economists note. Businesses facing higher costs and uncertainty have been hesitant to expand payrolls.

Still, layoffs remain far below levels seen during recessions, and analysts say the real question now is whether this slowdown becomes a plateau or the start of a sharper downturn.

As RBC Capital Markets analyst Steven Shemesh put it earlier this week:

“The million-dollar question is how long consumers — and employers — can manage before pulling back more sharply.”

The Associated Press and Bloomberg contributed to this report