US applications for jobless benefits, a proxy for layoffs, tick down to 209,000 last week.

U.S. jobless claims edged down slightly last week, maintaining historically low levels despite recent high-profile layoff announcements from major corporations. The Labor Department reported Thursday that applications for unemployment benefits decreased by 1,000 to 209,000 for the week ending January 24, slightly above analysts’ expectations of 205,000 claims.

The previous week’s figure was revised upward by 10,000, according to the report. Weekly unemployment claims data serves as a key real-time indicator of layoff activity across the American economy.

The modest decline comes amid contradictory signals in the labor market. Several prominent companies have recently announced workforce reductions, with UPS, Amazon, and Dow Chemical all unveiling job cuts this week. These high-visibility layoffs, combined with sluggish government employment data, have contributed to growing pessimism among Americans regarding economic conditions.

Earlier this month, December’s employment report revealed continued weakness in job creation, with employers adding just 50,000 positions. This tepid growth capped a year of underwhelming employment gains that have frustrated job seekers despite the persistently low unemployment rate. The unemployment rate did edge down slightly to 4.4% from 4.5% in November.

The labor market’s performance in 2025 has been notably weak, with the economy generating only 584,000 jobs for the entire year—averaging about 50,000 per month. This represents a dramatic slowdown from 2024, when approximately 2 million jobs were created at an average monthly pace of 170,000.

“Outside of recession periods, this is the weakest annual job growth we’ve seen in over two decades,” noted labor economist Michael Feroli of JPMorgan Chase. “The labor market is clearly in a cooling phase, though not yet showing signs of broad distress.”

The 2025 employment figures mark the smallest annual job gains since the COVID-19 pandemic devastated the job market in 2020. Excluding recession years, it’s the weakest annual performance since 2003. Analysts are forecasting similar modest job growth of around 50,000 for January’s employment report, due out next Friday.

Additional Labor Department data shows employers posted significantly fewer job openings in November compared to October, with available positions dropping to 7.1 million from 7.4 million. This decline suggests businesses aren’t yet ready to accelerate hiring despite improved economic growth in recent quarters.

Economists have observed an unusual “low hire, low fire” dynamic in the current labor market, where companies appear reluctant to expand their workforces but are simultaneously avoiding major layoffs.

The Federal Reserve has responded to the softening labor market by cutting its benchmark interest rate three consecutive times by 0.25 percentage points in the latter part of last year. However, on Wednesday, the central bank opted to leave rates unchanged, citing an improving economic outlook and what officials characterized as a stabilizing job market.

“The labor market has generally remained resilient despite slowing hiring and job creation,” Federal Reserve Chair Jerome Powell stated during his press conference on Wednesday. “We’re seeing a market that is rebalancing rather than deteriorating.”

The ongoing labor market slowdown reflects multiple economic headwinds, including uncertainty surrounding President Donald Trump’s tariff policies and the lingering effects of the aggressive interest rate increases the Fed implemented in 2022 and 2023 to combat post-pandemic inflation.

Thursday’s report also showed that the four-week average of jobless claims—which smooths out weekly fluctuations—rose by 2,250 to 206,250. Meanwhile, the total number of Americans collecting unemployment benefits for the week ending January 17 fell by 38,000 to 1.83 million, reaching its lowest level since September 21, 2024.