Fewer than expected Americans filed for unemployment benefits last week, as layoffs remain low

WASHINGTON (AP) — Fewer Americans filed for unemployment benefits last week as U.S. layoffs remain low despite growing concern about a weak labor market.

The Labor Department reported Thursday that U.S. jobless claims for the week ending Jan. 10 fell by 9,000 to 198,000, down from 207,000 the previous week. That number was well below the 215,000 figure expected by analysts polled by data firm FactSet.

Read more: Slow hiring caps off a frustrating year for job seekers

Claims for unemployment benefits are viewed as a proxy for layoffs and are close to a real-time indicator of the health of the labor market.

Last week, the government reported that hiring remained sluggish in December, capping a year of weak employment gains that discouraged job seekers even though layoffs and unemployment remained low.

The Labor Department said Friday that employers added just 50,000 jobs last month, virtually unchanged from the downwardly revised figure of 56,000 jobs in November. The unemployment rate fell to 4.4%, its first decline since June, from 4.5% in November, a figure that was also revised downward.

Also last week, the Labor Department reported that companies posted significantly fewer jobs in November than the previous month, a sign that employers have not yet ramped up hiring even as growth picks up.

Companies and government agencies recorded 7.1 million open jobs at the end of November, down from 7.4 million in October. Layoffs have also declined as companies appear to be retaining workers even though they are reluctant to add employees, a trend economists refer to as “low employment, low employment.”

Read more: The economy is giving mixed signals. Here’s what experts say they mean

Recent government data revealed a labor market in which hiring has clearly lost momentum, hurt by uncertainty raised by President Donald Trump’s tariffs and the lingering effects of higher interest rates designed by the Federal Reserve in 2022 and 2023 to rein in rising inflation caused by the pandemic.

In an effort to stabilize a weak labor market, the Federal Reserve last month cut its benchmark lending rate by a quarter of a percentage point, the third straight cut.

Federal Reserve Chairman Jerome Powell said committee members are increasingly concerned that the labor market is weaker than it appears. Powell suggested that the latest jobs numbers could be revised down by as much as 60,000 jobs, which means employers have actually lost an average of about 25,000 jobs per month since the spring, when the Trump administration imposed sweeping import taxes.

Companies that recently announced job cuts include UPS, General Motors, Amazon and Verizon.

The Labor Department report released Thursday also said the four-week average unemployment claims, which adjusts for some week-to-week fluctuations, fell by 6,500 to 205,000.

The total number of Americans filing for unemployment benefits for the previous week ending January 3 fell by 19,000 to 1.88 million, the government said.