Article 29 · Economy
Why weekly jobless claims look calm while big employers keep cutting staff
Each Thursday the US Labor Department counts people applying for unemployment benefits. The count is near its lowest in decades, yet hiring is thin and layoff announcements keep coming.
What the weekly claims number is
Every Thursday the US Labor Department reports how many people applied for unemployment benefits for the first time in the past week. Economists treat the count as a proxy for layoffs, and they watch it because it can be a sign of where the job market is headed, the Associated Press reports.
The number is low. Initial claims fell to 197,000 in the week ended September 26th, the lowest since 1969, according to the Labor Department. They have stayed below 200,000 for four straight weeks.
What the calm hides
The September jobs report told a different story. Employers added just 29,000 jobs, down from 133,000 in August and below what economists had forecast. The unemployment rate ticked up to 4.2%.
Heather Long, chief economist at the Navy Federal Credit Union, called the claims level "an incredibly low level of layoffs for a sustained period of time that hasn't been seen since the 1960s". She also noted that the number of people unemployed for more than six months is at a five-year high.
Economists call this a "low-hire, low-fire" market. People who have jobs rarely lose them. People who want a job, or want to switch, face a harder search. Outplacement firm Challenger, Gray & Christmas found hiring intentions 23% below last year's levels, according to 24/7 Wall St.
Why the layoff headlines and the data disagree
Large employers keep announcing cuts. The Los Angeles Times listed Verizon, UPS, Amazon, Disney, Starbucks and Walmart among the companies that had trimmed their workforce by July. Even so, claims stayed low.
Artificial intelligence is part of the story. Employers attributed 116,175 planned job cuts to AI through August, roughly 22% of all cuts announced in 2026, according to Challenger, Gray & Christmas. 24/7 Wall St. adds that AI gives executives an easy story to tell for headcount reductions, even when the real reason is ordinary cost cutting.
Our scenario brief reads the gap between the headlines and the data as a lag. The open question is whether the strain reaches the official claims count or stays out of sight.
Why workers are uneasy anyway
The share of Americans expecting unemployment to rise over the next year climbed in August to its highest level since April 2020, the New York Federal Reserve Bank found. The mean probability people gave to a higher unemployment rate in a year was 44.4%.
Maruf Ahmed, chief executive of the staffing firm Dexian, told the Daily Caller News Foundation: "Layoff numbers tell us what has happened, while worker anxiety is increasingly about what could happen next."
What to watch, and by when
The weekly claims count is the number to track, and it arrives every Thursday. Carl Weinberg, chief economist at High Frequency Economics, told 24/7 Wall St. that elevated energy costs and material prices could eventually force firms to lay off marginal workers, but that there is no sign of it yet.
Our scenario brief maps the possible outcomes, from a quiet freeze that holds to claims that finally break higher: www.vektora.md/briefs/layoffs-jobless-gap/