The number of Americans filing for unemployment benefits fell to 194,000 last week, the fewest in three months, the Labor Department reported on Thursday — another sign that layoffs remain remarkably low even as high energy prices squeeze businesses and households.
Claims dropped by 6,000 from the previous week’s revised figure of 200,000, beating economists’ expectations of around 200,000. It was the lowest reading since July, when claims briefly touched 189,000, a multi-decade low. The four-week moving average, which smooths out weekly swings, eased to 197,750. Claims have stayed at historically low levels all year, never rising above 230,000 in any single week.
The picture is not entirely one-directional. Continuing claims — the number of people still receiving benefits after an initial week — rose by 25,000 to 1.73 million in the week ending October 10, a six-week high. In other words, few people are losing their jobs, but those who do are taking longer to find new ones. Economists have taken to describing the result as a “low-hire, low-fire” labour market: companies confident enough in their sales to hold on to staff, but cautious about expanding.
That caution has defined the year. Employers have added an average of 68,000 jobs a month in 2026 — an improvement on a lacklustre 2025, when monthly job creation averaged just 9,700 amid high interest rates and unpredictable trade policy — but still far below the 166,000 a month averaged in 2023 and 2024, and a fraction of the pandemic-recovery boom. The unemployment rate ticked up to a still-low 4.2% last month.
The resilience is notable given the backdrop. Energy prices have been elevated since fighting involving Iran began in late February, raising costs for fuel-dependent businesses and eroding consumer spending power. So far, that pressure has shown up in slower hiring rather than in job cuts.
Financial markets read the report as one more reason for the Federal Reserve to stay patient. Gold, which has been sensitive to any sign of economic weakness all year, slipped further below $4,100 an ounce after the data, as traders reasoned that a labour market this firm gives the central bank little cause to loosen policy. “Layoffs aren’t picking up, and that gives the Fed no reason to ease,” said Waleed Said, a technical analyst at GivTrade, while noting the detail most likely to be missed: with continuing claims at 1.73 million, people who do lose a job are taking longer to find another one. “Firing is low, but hiring is slowing,” he said.
For the Federal Reserve, which meets on October 27–28, the data cuts both ways. A labour market this stable gives policymakers room to focus on inflation — itself being pushed up by energy costs — rather than rushing to support employment. But the rise in continuing claims is the detail worth watching: if the low-fire half of the market’s bargain breaks down, it usually does so quickly.
Sources:
Associated Press — https://www.kcau9.com/news/business/ap-us-jobless-claims-fell-to-194000-last-week-lowest-since-july/
Bloomberg News — https://news.bloombergtax.com/payroll/us-initial-jobless-claims-fall-to-three-month-low-of-194-000-2
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