The number of Americans applying for unemployment benefits rose last week, but layoffs remain in the historically healthy range of the past few years.
U.S. filings for jobless aid in the week ending July 25 rose by 9,000 to 197,000, the Labor Department reported Thursday. The previous week’s figure was revised up by 1,000 to 188,000 but remains the lowest in more than 50 years.
Analysts surveyed by the data firm FactSet forecast 207,000 new applications.
Weekly filings for unemployment benefits are considered representative of layoffs and are close to a real-time indicator of the health of the U.S. job market.
Despite surging oil prices resulting from the U.S.-Iran war, the American job market remains healthy. However, analysts say a prolonged war and higher-than-normal energy costs may eventually upend that, forcing companies to trim their costs by reducing head counts.
Following a 6.6% rise a day earlier, the price for a barrel of U.S. crude fell slightly more than 1% Thursday to $83.36 a barrel. Gas prices in the U.S. are also back up above $4 a gallon on average. Besides squeezing consumers’ budgets, it also hits businesses hard, especially those that are heavily dependent on fuel.
Also Thursday, the Federal Reserve’s preferred inflation metric, PCE, came in at 3.7%, still well above its 2% target. On top of that, the government reported Thursday that the U.S. economy grew at an unexpectedly sluggish 1.5% pace in the April-June quarter.
If inflation remains elevated, Fed officials say they are ready to raise interest rates to combat higher prices, raising costs for businesses and making them less likely to hire.
In its expansive June jobs report earlier this month, the government reported that employers pulled back on hiring, 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 Donald 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, Walmart and Microsoft.
The Labor Department’s report Thursday also showed that the four-week moving average of weekly jobless claims, which softens some of the weekly volatility, fell by 5,000 to 202,750.
The total number of Americans filing for unemployment benefits for the previous week ending July 18 was 1.78 million, a decline of 7,000 from the previous week.
