While layoffs remain relatively low, hiring has slowed as tariffs weigh on business confidence|Amtec Photos|CC BY-SA 2.0

The number of Americans filing for new unemployment benefits fell sharply last week, signaling resilience despite a cooling labor market. 

Initial claims dropped by 33,000 to 231,000 for the week ending September 13, reversing the prior week’s jump to 264,000, the highest since 2021. 

Economists had expected 240,000 claims. Texas drove much of the earlier spike, which officials later linked to identity fraud attempts.

While layoffs remain relatively low, hiring has slowed as tariffs weigh on business confidence and immigration curbs reduce labor supply. Federal Reserve Chair Jerome Powell called this a “curious balance.”

Analysts say the jobless claims are too low to suggest a recession.

The Fed cut its benchmark rate to 4.00%–4.25% this week, aiming to support the job market.