US Jobless Claims Fall as September Layoffs Decline

New applications for US Unemployment benefits fell last week while planned layoffs by US-based employers also declined in September, pointing to continued stability in the labour market even as businesses remain cautious about expanding their workforces.

Initial claims for state unemployment benefits decreased by 1,000 to a seasonally adjusted 197,000 for the week ended September 26, according to data from the US Labor Department. Economists surveyed by Reuters had expected 200,000 claims.

US Jobless Claims Remain Near Multi-Decade Lows

The latest claims figure suggests that layoffs remain relatively limited despite several pressures facing the US Economy.

Initial jobless claims are closely watched because they provide an early indication of changes in labour-market conditions. A sustained increase can signal that companies are cutting Jobs, while low claims generally indicate that employers are retaining workers.

Claims have remained close to their lowest levels in decades. At the same time, economists have noted that strong corporate profits and resilient domestic demand have helped businesses maintain employment despite higher energy costs and uncertainty surrounding the economy.

September Layoffs Also Declined

A separate report from global outplacement firm Challenger, Gray & Christmas showed that announced layoffs by US-based employers fell 18% in September to 43,281.

Planned job cuts were also 20% lower than in September of the previous year. During the first nine months of 2026, employers announced 573,195 layoffs, representing a 39% decline compared with the same period in 2025.

Layoff announcements fell 43% during the third quarter, providing another indication that employers have generally been reluctant to make large-scale reductions in their workforces.

Employers Remain Cautious About Hiring

The data on layoffs is more encouraging than the picture for new hiring.

Employers reported plans to increase hiring by 90,787 positions in September. That was a substantial increase from the 12,325 planned hires announced in August, but hiring intentions were still 23% below the level recorded a year earlier.

The September figure was also the lowest hiring-intention tally for the month since 2011, according to Challenger, Gray & Christmas.

The company also noted that the usual increase in seasonal hiring that typically begins in September was absent this year.

Businesses Adopt a Wait-and-See Approach

Andy Challenger, chief revenue officer at Challenger, Gray & Christmas, said companies were taking a cautious approach to employment decisions.

Businesses are facing several uncertainties, including elevated energy costs, geopolitical risks, borrowing costs and potentially higher healthcare expenses. These factors can make companies more hesitant to commit to significant increases in payrolls.

The result is a labour market in which employers appear reluctant to cut existing jobs but are also cautious about adding new workers.

Energy Prices Add Pressure on Employers

Higher energy prices are another challenge for US businesses. Rising fuel costs can increase expenses for transportation companies, manufacturers, retailers and other businesses that depend on energy-intensive operations.

Companies may respond to higher operating costs by delaying expansion plans or limiting new hiring. However, the latest unemployment claims data suggest that these pressures have not yet translated into a broad increase in layoffs.

The interaction between energy costs, consumer demand and corporate profitability will remain important for the labour market in the coming months.

Federal Reserve Rate Policy Remains Important

Interest rates are another factor influencing hiring decisions. The Federal Reserve recently raised its overnight benchmark interest rate by 25 basis points to a range of 3.75% to 4.00%, according to the report.

The increase was the first rate hike in three years and came as policymakers indicated that borrowing costs could rise further.

Higher interest rates can increase the cost of financing for businesses. Companies considering expansion, new facilities or additional employees may therefore reassess spending plans when borrowing becomes more expensive.

For workers, the effect of higher rates can be indirect. A slowdown in business investment and economic activity could eventually reduce demand for new employees, although the latest claims data do not yet show a broad deterioration in job retention.

Continuing Jobless Claims Also Fall

The Labor Department report showed that the number of people receiving unemployment benefits after an initial week of assistance also declined.

Continuing claims fell by 11,000 to a seasonally adjusted 1.701 million for the week ended September 19.

Continuing claims are often viewed as an indicator of how quickly unemployed workers are finding new jobs. The latest level remained toward the lower end of its range for the year.

However, the data also suggest that some people who have lost their jobs are experiencing longer periods of unemployment. This means that low initial claims do not necessarily indicate that every part of the labour market is equally strong.

Consumer Views of the Job Market Have Weakened

Other recent economic data have shown a less positive perception of employment conditions.

A Conference Board survey found that the share of consumers describing jobs as “plentiful” fell in September to its lowest level since February 2021.

At the same time, the proportion of consumers saying jobs were “hard to get” reached its highest level in more than five and a half years.

The contrast between low unemployment claims and weaker consumer perceptions suggests that the labour market may be stable but less comfortable for job seekers than headline layoff numbers alone indicate.

Jobless Claims Do Not Affect September Payroll Data

The latest weekly claims figures do not directly affect the September employment report because the claims data cover a period outside the survey window used for the monthly jobs report.

Economists surveyed by Reuters expect US nonfarm payrolls to have increased by 90,000 in September after rising by 162,000 in August.

The unemployment rate is expected to remain at 4.1% for a third consecutive month, although economists see some upside risk to the unemployment rate.

The monthly employment report will therefore provide a broader picture of hiring, unemployment and wage conditions than the weekly claims data alone.

What the Latest Data Mean for the US Labour Market

The latest reports present a mixed picture of the US employment market.

On one side, initial unemployment claims remain low, planned layoffs have declined and continuing claims have edged lower. These indicators suggest that employers are generally retaining existing workers.

On the other side, hiring plans remain weak compared with last year, seasonal hiring has not shown its usual increase and consumer perceptions of job availability have deteriorated.

Together, the figures point to a labour market where job losses remain relatively contained but employers are exercising caution about creating new positions.

What to Watch Next

The September employment report will be a key indicator for determining whether the slowdown in hiring intentions is translating into weaker overall job creation.

Investors and policymakers will also monitor unemployment claims, continuing claims, consumer demand, corporate hiring plans and the impact of borrowing and energy costs.

If layoffs remain low but hiring continues to slow, the labour market could show a different pattern from previous downturns, with employment stability accompanied by fewer opportunities for workers entering or changing jobs.

Frequently Asked Questions

1. How many Americans filed new unemployment claims last week?

Initial applications for state unemployment benefits fell by 1,000 to a seasonally adjusted 197,000 for the week ended September 26.

2. What did economists expect for weekly jobless claims?

Economists surveyed by Reuters had expected 200,000 initial unemployment claims for the latest week.

3. Did US layoffs increase in September?

No. Challenger, Gray & Christmas reported that planned layoffs by US-based employers fell 18% in September to 43,281.

4. How many layoffs have US employers announced in 2026?

Employers announced 573,195 layoffs during the first nine months of 2026, according to Challenger, Gray & Christmas.

5. Are US companies increasing hiring?

Hiring plans increased in September compared with August, but planned hiring remained 23% below the level recorded a year earlier and was the lowest September tally since 2011.

6. What happened to continuing unemployment claims?

Continuing claims fell by 11,000 to 1.701 million for the week ended September 19.

7. What does the latest jobless claims report indicate?

The low level of initial claims indicates that broad layoffs remain limited, although other data show that employers are cautious about expanding their workforces.

8. What is expected in the September US jobs report?

Economists surveyed by Reuters expect nonfarm payrolls to have increased by 90,000 in September, while the unemployment rate is forecast to remain at 4.1% for a third consecutive month.