Initial claims for state unemployment benefits increased to 199,000 in the week ended August 1 from a revised 198,000 a week earlier. Weekly claims are regarded as an indicator of layoffs and provide one of the earliest readings on the health of the US labour market.
Claims remain below 200,000
The four-week moving average, which smooths week-to-week fluctuations, fell by 4,500 to 198,750.
Continuing claims, which reflect the number of people receiving unemployment benefits, rose by 24,000 to 1.8 million in the week ended July 25.
Weekly jobless claims have largely remained between 200,000 and 250,000 since the US economy emerged from the pandemic recession. Hiring, however, has slowed over the past two years and eased further in 2025 as businesses responded to tariffs imposed by President Donald Trump, reductions in the federal workforce and the impact of higher interest rates.
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Labour market in focus
The claims data comes ahead of the government’s July employment report, due on Friday.
In June, US employers added 57,000 jobs, less than half the number recorded in the previous month. The unemployment rate fell to 4.2% from 4.3%, although the decline reflected fewer people actively looking for work.
The latest labour market figures also come as inflation remains above the US Federal Reserve’s target. The personal consumption expenditures (PCE) price index, the central bank’s preferred inflation measure, stood at 3.7% in June, above its 2% goal.
Federal Reserve officials have indicated they are prepared to raise interest rates further if inflation remains elevated, a move that could increase borrowing costs for businesses and weigh on hiring.
Companies including Verizon, UPS, Amazon, Disney, Starbucks, Walmart and Microsoft have announced workforce reductions in recent months.