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While layoffs are low, hiring has also weakened as part of what many economists describe as a “no hire, no fire” economy.
WASHINGTON — The number of Americans applying for jobless benefits saw a slight increase last week, indicating that employers are largely keeping their workforce intact despite signs of economic deceleration.
The Labor Department reported Thursday that unemployment benefit applications for the week ending Aug. 30 climbed by 8,000 to 237,000. This exceeded economists’ expectations of 231,000 new applications.
Weekly jobless benefit applications are considered an indicator of layoffs and have generally remained within a healthy historical range of 200,000 to 250,000 since the U.S. began recovering from the COVID-19 pandemic almost four years ago.
Although layoffs remain low, hiring has also slowed, which many economists characterize as a “no hire, no fire” situation. Nonetheless, the unemployment rate is still at a historically low 4.2%.
On Wednesday, the government announced that U.S. employers had 7.2 million job openings at the close of July, falling short of economists’ predictions and highlighting continued weaknesses in the U.S. labor market.
The gloomy July jobs report from last month, displaying a mere 73,000 job additions along with significant downward revisions for June and May, triggered turmoil in financial markets.
President Donald Trump fired the head of the agency that compiles the monthly data.
The government issues its August jobs report on Friday, with economists expecting that U.S. employers added a slim 80,000 private non-farm jobs.
New jobs numbers are being closely watched on Wall Street and by the Federal Reserve as the most recent government data suggests hiring has slowed sharply since this spring. Job gains have averaged just 35,000 a month in the three months ending in July, barely one-quarter what they were a year ago.
Growth has weakened so far this year as many companies have pulled back on expansion projects amid the uncertainty surrounding the impacts of President Donald Trump’s tariff policies. Growth slowed to a 1.3% annual rate in the first half of the year, down from 2.5% in 2024.
The sluggishness in the job market is a key reason that Federal Reserve Chair Jerome Powell signaled last week that the central bank may cut its key interest rate at its next meeting Sept. 16-17. A cut could reduce other borrowing costs in the economy, including mortgages, auto loans, and business loans.
The Labor Department’s report Thursday showed that the four-week average of claims, which softens some of the week-to-week volatility, rose by 2,500 to 231,000.
The total number of Americans collecting unemployment benefits for the previous week of Aug. 23 fell by 4,000 to 1.94 million.
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