Jobless claims drop to 10-week low as layoffs stay rare

Filings for unemployment benefits fell last week to the lowest level in 10 weeks as U.S. layoffs remain historically low.

The number of Americans applying for jobless aid in the week ending July 11 dropped by 8,000 to 208,000, the Labor Department reported Thursday. That’s well below the 219,000 new applications forecast by analysts surveyed by the data firm FactSet.

Weekly filings for unemployment benefits are considered a proxy for layoffs and are close to a real-time indicator of the health of the U.S. job market.

In its more comprehensive June jobs report earlier this month, the government reported that employers pulled back on hiring in June, adding only 57,000 jobs. That’s less than half the previous month’s total and a sign that companies remain cautious about adding to their head counts.

The unemployment rate dropped to 4.2% from 4.3% in May, though that decline is mostly because many out-of-work people gave up looking for jobs and were no longer counted as unemployed.

June’s tepid hiring comes after a relative surge in job gains the previous three months, countering concerns that the war in Iran could trip up an already wobbly labor market.

Weekly jobless aid applications have stabilized in a range mostly between 200,000 and 250,000 since the U.S. economy emerged from the pandemic recession. However, hiring began slowing about two years ago and tapered further in 2025 due to President Trump’s tariffs, his purge of the federal workforce and the lingering effects of high interest rates meant to control inflation.

Among the companies that have trimmed their workforce recently are Verizon, UPS, Amazon, Disney, Starbucks and Walmart.

Last 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.

Thursday’s layoffs data showed that the four-week moving average of weekly jobless claims, which adjusts for volatility, declined by 4,750 to 214,250.

The total number of Americans filing for unemployment benefits for the previous week ending July 4 fell by 16,000 to 1.81 million, also a historically healthy figure.

Ott writes for the Associated Press.