U.S. jobless claims fall to 215,000 as layoffs stay historically low

Applications for US unemployment benefits slipped last week, extending a stretch of subdued filings that suggests employers remain reluctant to cut workers even as hiring slows.

Initial claims for state unemployment benefits decreased by 2,000 to a seasonally adjusted 215,000 in the week ended July 4, the Labor Department said Thursday. The reading came in below the 217,000 median forecast in a Bloomberg survey of economists and the 218,000 estimate in a Reuters poll.

"The labor market is stuck in a 'slow hire, slow fire' state — there has been no material shift in conditions," said James Okafor, macro analyst at Edgen. "Claims have stabilized in a range that historically signals a tight labor market, even as the pace of job creation has moderated."

The four-week moving average of jobless claims, which smooths out weekly volatility, fell by 3,750 to 218,750. Continuing claims — the number of Americans receiving unemployment benefits after an initial week of aid — rose by 8,000 to 1.814 million during the week ended June 27, a figure economists attributed partly to seasonal adjustment issues related to school holidays.

The claims data comes after the government's June jobs report showed employers added just 57,000 positions, less than half the prior month's total and well below the pace needed to keep the unemployment rate stable. The jobless rate edged down to 4.2% from 4.3% in May, though largely because some out-of-work people stopped looking for jobs and were no longer counted as unemployed.

Minutes of the Federal Reserve's June 16-17 meeting, published Wednesday, showed policymakers "generally expected labor market conditions to remain stable in the near term, with the unemployment rate staying close to current levels." The Fed left its benchmark interest rate unchanged at 3.50%-3.75% in June, though new projections revealed a growing sentiment around a likely rate hike this year. US stock index futures held near flat after the claims release, with the S&P 500 little changed in pre-market trading, as the data fell within the narrow range that investors have come to expect.

Weekly jobless aid applications have mostly held between 200,000 and 250,000 since the US economy emerged from the pandemic recession — a range that historically points to limited layoffs. However, hiring began decelerating about two years ago and tapered further in 2025 as President Donald Trump's tariffs, the purge of the federal workforce and lingering effects of high interest rates weighed on business confidence.

Among companies that have trimmed their workforce recently are Verizon, UPS, Amazon, Disney, Starbucks and Walmart. Earlier this week, Microsoft said it was cutting 4,800 jobs, about 2.1% of its global workforce, including a large number of workers at its Xbox video game business.

This article is for informational purposes only and does not constitute investment advice.