US jobless claims fall as layoffs stay low

US jobless claims declined last week, signaling continued stability in layoffs even as economic uncertainty grows. New filings for unemployment benefits dropped to 202,000, reinforcing the idea that employers remain cautious about cutting staff.

The latest data from the US Department of Labor showed a decrease of 9,000 claims from the previous week. Notably, the figure came in below analyst expectations, indicating resilience in the labor market.

Layoffs remain historically low despite warning signs

However, warning signs are emerging. Several major companies—including Oracle, Morgan Stanley, Amazon, UPS, and Block—have announced job cuts in recent weeks.

These layoffs suggest that while the broader labor market remains stable, pressure is building beneath the surface.

Hiring slows as economic uncertainty increases

Although layoffs are limited, hiring has slowed significantly. Employers added fewer than 200,000 jobs last year, a sharp drop from the previous year’s growth.

The slowdown reflects multiple factors. Policy uncertainty, shifting trade dynamics, and high interest rates have all weighed on hiring decisions.

At the same time, recent data revealed that employers cut 92,000 jobs in February. This unexpected decline highlights growing strain in the labor market.

Iran war and inflation add new pressures

The conflict involving Iran has introduced additional economic risks. Rising oil prices—up more than 40%—are increasing costs for businesses and consumers alike.

Inflation was already elevated before the conflict. The Fed’s preferred measure showed prices rising 2.8% year-over-year, above the central bank’s 2% target.

As a result, the Federal Reserve has kept interest rates steady, signaling caution amid ongoing uncertainty.

A ‘low-hire, low-fire’ labor market

Economists describe the current environment as a “low-hire, low-fire” market. Companies are reluctant to lay off workers, but they are also hesitant to expand hiring.

This dynamic helps keep unemployment relatively low. However, it creates challenges for job seekers, who may struggle to find new opportunities.

Meanwhile, the four-week moving average of claims declined slightly, offering further evidence of short-term stability.

Outlook remains uncertain

Despite the drop in US jobless claims, the broader outlook remains unclear. Rising energy costs, persistent inflation, and global tensions continue to shape economic expectations.

The upcoming jobs report will provide further insight into whether the labor market can maintain its resilience—or if deeper cracks are beginning to form.