Fewer Americans filed initial claims for unemployment benefits in the latest week, a sign layoffs stayed limited even as concerns grew about hiring slowing in the U.S.
For the week ending Jan. 10, 198,000 people applied for unemployment benefits, the U.S. Department of Labor reported Thursday. That was down from 207,000 the prior week, a decline of 9,000. The figure also came in well below the 215,000 analysts expected in a FactSet poll.
Unemployment benefit applications are viewed as a proxy for layoffs and are treated as a near real-time indicator of labor-market conditions. Last week’s lower filings arrived after the government reported that hiring remained sluggish in December, capping a year of weak employment gains that have frustrated job seekers even though layoffs and unemployment remained low.
Separate Labor Department data also showed employers added just 50,000 jobs in December, nearly unchanged from a downwardly revised 56,000 in November. The unemployment rate slipped to 4.4%, its first decline since June, from 4.5% in November, which was also revised lower.
The Labor Department’s broader readings on hiring also pointed to less momentum. In the same reporting period, it said businesses posted far fewer jobs in November than the previous month, and at the end of November, businesses and government agencies had 7.1 million open jobs, down from 7.4 million in October.
Even with low layoffs, the latest trend described in the reporting reflected a “low hire, low fire” pattern in which companies appear to retain workers while remaining reluctant to add staff. Economists cited this as a sign hiring has slowed even as job losses have stayed contained.
Recent government data also reflected a labor market facing headwinds from economic uncertainty. The report said hiring momentum has been hobbled by uncertainty raised by President Donald Trump’s tariffs and the lingering effects of high interest rates set by the Federal Reserve in 2022 and 2023 to rein in pandemic-era inflation.
In an effort to stabilize a softening labor market, the Federal Reserve last month trimmed its benchmark lending rate by a quarter-point, its third straight cut. Fed Chair Jerome Powell said committee members were increasingly concerned the job market was even weaker than it appears, and he suggested job figures could be revised lower by as much as 60,000—an adjustment that the report said would imply employers had been shedding about 25,000 jobs per month on average since the spring, when the administration rolled out its import taxes.
The report also noted that some companies had recently announced layoffs, including UPS, General Motors, Amazon and Verizon.
Thursday’s Labor Department report further said the four-week average of jobless claims fell by 6,500 to 205,000. It also said the total number of Americans filing for jobless benefits for the previous week ending Jan. 3 declined by 19,000 to 1.88 million.