Unemployment Claims, Layoffs Stay Low Ahead of Friday’s Jobs Report

The number of Americans filing claims for unemployment benefits and U.S. firms announcing layoffs declined recently, key data that precede the September jobs report show.

Initial jobless claims came in below 200,000 for the third consecutive week, according to Department of Labor data published on Oct. 1.

They dipped by 1,000 to a lower-than-expected 197,000 in the week ending Sept. 26, from the previous week’s upwardly revised 198,000.

Stripping out week-to-week volatility, the four-week average decelerated to 200,000.

Economists generally use jobless claims as a proxy for layoffs, and they have been entrenched in a historically low range of 189,000 to 230,000 this year.

Additionally, continuing jobless claims fell for the fourth straight week to 1.701 million, also lower than the consensus forecast.

Recurring claims—a measure of individuals currently receiving unemployment benefits—have been trending lower over the past year. They could also slide below 1.7 million for the first time since April 2023.

This is often used as a gauge of how difficult it is to find new employment opportunities.

It could also signal more Americans exhausting their unemployment benefits, as many states cap eligibility at 26 weeks.

Inside Layoffs

A private-sector look at the U.S. labor market also reaffirmed the country’s low layoff levels.

Employers announced 43,281 job cuts in September, down 18 percent from the previous month’s 52,881, according to global outplacement firm Challenger, Gray and Christmas.

Last month’s layoffs were down 20 percent from September 2025 and represented the lowest tally for the month since 2022.

In the January–September span, U.S.-based firms have announced more than 573,000 planned layoffs, down 39 percent year over year. This was also the lowest year-to-date total since 2022.

“Companies are in a wait-and-see period right now. Employers are facing high energy costs, an uncertain war in Iran, a rate hike that could make hiring more expensive, plus the likelihood of surging healthcare costs,” Andy Challenger, the firm’s chief revenue officer, said in a news release.

“We’ve seen layoff activity subside over this year, and September continues to illustrate this point.”

Technology companies reported 10,799 layoffs, a 77 percent increase from August. Food producers also announced more than 7,300 job cuts—the second consecutive month above 7,000.

This was followed by nonprofits (4,742), services (3,306), and transportation (2,151).

Market and economic conditions, artificial intelligence (AI), and restructuring were the most commonly cited reasons.

As the economy prepares for the busy holiday shopping season, companies are reviewing headcount.

Employers said they plan to hire almost 91,000 workers in September, up substantially from the more than 12,000 announced in August.

This is driven almost entirely by seasonal hiring, although Challenger, Gray and Christmas say it has been muted so far.

Michaels and Spirit Halloween announced a combined 62,000 seasonal hires, down sharply from the nearly 101,000 reported a year ago.

September Jobs Report

The Bureau of Labor Statistics will release September nonfarm payrolls on Oct. 2.

Economists estimate 90,000 new jobs were added in September, and the unemployment rate held steady at 4.1 percent for the third consecutive month.

If accurate, this gain would be firmly above the three-month average of about 71,000.

After anemic May–July hiring, job growth picked up momentum in August, with companies adding 162,000 positions, the best level since March.

Other metrics suggest U.S. firms may have an appetite for hiring heading into the fall.

Private sector payrolls surged by 90,000 last month, ADP reported on Sept. 30.

This rebounded from the tepid 36,000 gain in August and came in firmly above the market forecast of 70,000.

But a September jobs report surpassing economists’ expectations could be bad news for Wall Street, says Tom Essaye, president and co-founder of the Sevens Research Report.

“For the third month in a row, the biggest risk for tomorrow’s jobs report for markets is that it prints ‘Too Hot’ and pushes yields higher and increases the likelihood we get two more rate hikes in 2026, not just one more hike,” Essaye said in a note emailed to The Epoch Times.

While traders have trimmed their bets on an October rate hike, the latest batch of data points to a strong economy that could endure higher interest rates.

With the Federal Reserve seeking to control inflation, resilient economic conditions could give monetary policymakers the room to follow through on at least one more rate hike before the year is over.

“Bottom line, tomorrow’s jobs report is all about its impact on Fed rate hike expectations, and the more Goldilocks (meaning a positive jobs number but only modestly so), the better for markets because it will imply solid growth with potentially fewer rate hikes,” Essaye said