US job market: Fewer Americans filed for jobless benefits; applications fell to 229,000

The number of Americans seeking unemployment benefits fell last week, suggesting companies are reluctant to lay off workers even as the economy loses momentum. For the week ending 23 August, applications for jobless aid dropped by 5,000 to 229,000, the US Labour Department reported on Thursday. The figures come at a time when the jobs market is being closely monitored by Wall Street and the Federal Reserve. According to government data cited by AP, hiring has slowed significantly since spring. Job gains averaged at 35,000 a month in the three months to July, less than a quarter of last year’s pace. Unemployment benefit claims are a key proxy for layoffs and have mostly stayed in the range of 200,000 to 250,000 since the country emerged from the COVID-19 pandemic more than three years ago. Despite the low level of layoffs, hiring has weakened, a trend many economists now call a “no hire, no fire” economy. The unemployment rate remains at a relatively low 4.2%. Economic growth has also cooled this year, with businesses holding back on expansion plans amid uncertainty over President Donald Trump’s tariff policies. The economy grew at just a 1.3% annual rate in the first half of 2025, down from 2.5% in 2024, AP reported. The slowdown has increased expectations that the Fed could cut interest rates at its next meeting on 16–17 September. Fed Chair Jerome Powell signalled last week that a reduction in the key rate may be on the cards, which could in turn lower costs for mortgages, car loans and business borrowing. The latest report also showed that the four-week average of claims, which smooths out fluctuations, rose by 2,500 to 228,500.The number of people continuing to receive unemployment benefits for the week ending August 16 slipped by 7,000 to 1.95 million. Though slightly lower, that figure is still close to a four-year high, pointing to the difficulties many jobseekers face in securing new work once unemployed.