U.S. jobless claims applications jumped to their highest level in almost four years last week, the latest sign that the labour market is softening.
The number of Americans filing for unemployment benefits for the week ending Sept. 6 rose by 27,000 to 263,000, the Labor Department reported Thursday. That’s the most filings since the week of Oct. 23, 2021, and well above the 231,000 new applications economists forecast.
Weekly applications for jobless benefits are considered a proxy for layoffs and have mostly settled in a historically low range between 200,000 and 250,000 since the U.S. began to emerge from the Covid pandemic nearly four years ago.
Despite last week’s increase, layoffs remain relatively low by historical measures and hiring has weakened — a trend that economists describe as “no hire, no fire.”
Earlier this week, the Bureau of Labor Statistics issued a preliminary revision of U.S. job gains for the 12 months ending in March, further evidence that the labour market has not been as strong as previously thought.
The revised figures showed that U.S. employers added 911,000 fewer jobs than originally reported in the year ending in March 2025, with the biggest weakness in the leisure and hospitality sector, professional and business services, and retail. The report also showed that job gains were tapering long before President Donald Trump rolled out his far-reaching tariffs on U.S. trading partners in April.
The department issues the revisions every year to better account for new businesses and ones that have closed. Final revisions will come out in February 2026.
The updated figures came after the agency reported Friday that the economy generated just 22,000 jobs in August, well below the 80,000 economists were expecting.
Also last week, the government said U.S. employers advertised 7.2 million job openings at the end of July, fewer than economists had forecast and the first time since April 2021 that there were more unemployed Americans than job postings.
July’s employment report, which showed job gains of just 73,000 and included large downward revisions for June and May, sent financial markets spiralling and prompted Trump to fire the head of the agency that compiles the monthly data.
The various labour market reports have bolstered fears that Trump’s economic policies, including unpredictable taxes on imports, have created so much uncertainty that businesses are reluctant to hire.
Broader U.S. economic growth has weakened so far this year as many companies have pulled back on expansion projects amid the uncertainty surrounding the tariffs. Growth slowed to about a 1.3% annual rate in the first half of the year, down from 2.5% in 2024.
The sluggishness in the job market is a key reason Federal Reserve Chair Jerome Powell recently signalled that the central bank may cut its key interest rate at its meeting next week. A cut could reduce borrowing costs across the economy, including mortgages, auto loans and business borrowing.
While a rate cut could spur economic growth, economists fear it could push inflation even farther above the Fed’s target of 2%.
Thursday’s report showed that the four-week average of claims, which evens out some week-to-week volatility, rose by 9,750 to 240,500.
The total number of Americans collecting unemployment benefits for the previous week ending Aug. 30 was unchanged at 1.94 million.