No layoffs, no hiring! US initial jobless claims fall to lowest since July, September layoffs down 18%

U.S. initial jobless claims fell last week to the lowest level since July and layoffs declined in September, indicating that the labor market remains stable even as employers stay cautious about adding workers. The Labor Department said on Thursday that seasonally adjusted initial claims fell by 1,000 to 197,000 in the week ended Sept. 26. Economists had expected 200,000. The number of people receiving benefits after an initial week of aid, a proxy for hiring, decreased by 11,000 to a seasonally adjusted 1.701 million in the week ended Sept. 19, the lowest level since March 2023. While the so-called continuing claims are at the lower end of this year's range, some unemployed people are experiencing long-term unemployment. The four-week moving average of initial claims, used to smooth out volatility, fell to 200,000, a seven-week low. Despite growing headwinds from the Iran war and higher energy prices, with diesel prices at record highs, U.S. initial jobless claims remain near a 57-year low. Economists say strong corporate profit growth and resilient domestic demand are shielding workers from layoffs. A separate report from global outplacement firm Challenger, Gray & Christmas showed that U.S. employers planned to cut 43,281 jobs in September, down 18%. Announced layoffs were down 20% year over year. So far this year, employers have announced 573,195 job cuts, down 39% from the first nine months of 2025. Planned layoffs fell 43% in the third quarter. However, employers are in no hurry to add to their headcounts. Hiring plans increased by 90,787 last month. While that was up sharply from 12,325 in August, hiring intentions were down 23% year over year and were the lowest for any September since 2011. Challenger, Gray & Christmas said the seasonal hiring surge that typically begins in September did not materialize. "Companies are in a holding pattern right now," said Andy Challenger, chief revenue officer at Challenger, Gray & Christmas. "Employers are facing multiple pressures, including high energy costs, uncertainty over the Iran war, higher interest rates raising labor costs, and the possibility of a sharp increase in healthcare expenses." The Federal Reserve raised its overnight benchmark rate by 25 basis points last month to a 3.75%-4.00% range, its first rate hike in three years, and signaled that borrowing costs would rise further in the coming months. A survey released by the Conference Board on Tuesday showed that the share of consumers who said jobs were "plentiful" fell in September to the lowest level since February 2021, while the proportion who said jobs were "hard to get" was the highest in more than five and a half years. The jobless claims data fall outside the survey window for the September nonfarm payrolls report and therefore will not affect the payrolls figures. A survey of economists showed that nonfarm payrolls are expected to have increased by 90,000 last month after rising by 162,000 in August. The unemployment rate is expected to hold steady at 4.1% for a third straight month, but risks are skewed to the upside.