Weekly U.S. jobless claims fell to 189,000, the lowest since 1969, and continuing claims dropped to 1.79 million. The labor market is still doing one thing very well: keeping people employed. Labor Department data came in well below expectations, which puts a sharper line under how little firing has picked up despite higher costs and geopolitical stress.
The sticky sentence here is simple: jobs are still hard to lose. That’s the part the Fed has to live with. On Wednesday, policymakers left rates unchanged, saying inflation remains too high, while Jerome Powell said labor demand has softened into an “unusual and uncomfortable” balance. Reuters reported the same dynamic: low layoffs, but not a healthy job market for people trying to get in.
- Initial claims fell by 26,000 last week, far below the 215,000 Reuters poll estimate.
- Continuing claims dropped 23,000, suggesting firms are still reluctant to cut payrolls.
- Fed officials said the labor market remains in balance even as inflation is still running above target.
That changes the decision edge for workers and policymakers alike. A soft landing still looks like low hiring and low firing, which helps keep unemployment near 4.3% but makes it harder for anyone on the outside to break in. As long as claims stay near this range, the job market is giving the Fed little reason to cut rates to support employment.
What matters next is whether that resilience survives higher energy prices and war-linked inflation. If claims stay below 200,000, the labor market remains a constraint on rate cuts rather than a reason for them.
