Jobless claims dip again, keeping US layoffs in a healthy range

Jobless claims fall again, keeping weekly layoffs within a recent healthy range

The number of Americans applying for unemployment benefits declined again last week, according to the U.S. Department of Labor, suggesting that weekly layoffs remained within a range economists have characterized as relatively healthy for the past few years. The Labor Department said 227,000 people filed for jobless aid for the week ending Feb. 7, down from the prior week.

The latest figure extends a pattern in which initial jobless claims have generally stayed mostly between 200,000 and 250,000, even as high-profile companies have announced job cuts recently. The Labor Department’s data are often treated as a near-real-time indicator of layoffs, with applications for benefits viewed as representative of U.S. layoff activity.

In addition to the headline decline in weekly filings, the Labor Department also reported a rise in a smoothing measure of claims. It said the four-week moving average of jobless claims increased by 7,000 to 219,500, balancing out some of the week-to-week volatility that can affect the initial filings count.

The Labor Department further reported that the total number of Americans filing for jobless benefits for the previous week ending Jan. 31 rose by 21,000 to 1.86 million. That broader count, which tracks ongoing claims, moved higher even as initial applications dipped, underscoring that the labor market picture has continued to shift in multiple directions.

Recent government labor data have shown improvement at one point, while also reflecting revisions that reduced earlier estimates of hiring. In January, the government reported that employers added 130,000 jobs and the unemployment rate fell to 4.3% from 4.4%, but revisions cut 2024-2025 payroll jobs by hundreds of thousands, reducing the number of jobs created last year to 181,000—about a third of a previously reported 584,000.

Even with weekly jobless claims staying in the historically healthier band, the report notes that Americans have grown more pessimistic about the economy amid mounting layoff announcements and weaker signals in other labor-market measures. The Labor Department recently reported that job openings fell in December to the lowest level in more than five years, adding to concerns about sluggish hiring despite continued economic growth.

The data also feed into debate over whether stronger hiring in January represented a temporary rebound or instead signals labor-market recovery. Economists cited in the report are split over whether the pickup is a one-off or the first sign of a thaw that could influence the timing of further interest-rate cuts by the Federal Reserve.

The article notes that some Fed officials have pointed to last year’s weak hiring as evidence that borrowing costs have weighed on growth and discouraged companies from expanding. A sustained pickup in hiring, it said, could undercut that argument, even as Fed officials signaled in December they expected to reduce their key rate again this year.

Wall Street investors, meanwhile, have been pricing in two rate reductions based on futures market expectations, while weekly unemployment-benefit applications continue to indicate that layoffs have not broadly surged.