US jobless claims rise to 219,000, but layoffs remain relatively low

More Americans filed unemployment claims last week, but the labour market remains healthy and there are still relatively few layoffs.

US applications for jobless benefits rose by 11,000 to 219,000 for the week ending February 1, the Labour Department said Thursday. Analysts were projecting only 213,000 new applications. 

 

Weekly applications for jobless benefits are considered representative of layoffs.

The four-week average, which evens out some of the weekly volatility, rose by 4,000 to 216,750.

While the labour market did start to show some minor signs of weakness last year, jobs remain plentiful and layoffs historically low.

 

Last month, the Labour Department reported that job growth in December surged and unemployment fell. Employers added 256,000 jobs in the final month of 2024 and the unemployment rate ticked down to 4.1 per cent.

The final jobs report of 2024 showed that the economy and hiring were able to grow at a solid pace even with interest rates much higher than they were before the pandemic.

The Labour Department will release January employment figures early Friday. Economists surveyed by FactSet believe that US employers added 170,000 jobs in the first month of 2025, weaker than December but also still healthy.

As expected last week, the Federal Reserve left its benchmark lending rate alone after issuing three cuts late in 2024. Fed officials are keeping their eyes on inflation and the labour market for signs of a potentially weakening economy. They expect only two rate cuts this year, down from previous projections of four.

Overall, while layoffs remain low by historical standards, a host of companies have announced job cuts already this year.

Workday, Dow, CNN, Starbucks and Facebook parent company Meta have all trimmed their workforces already in 2025.

Late in 2024, GM, Boeing, Cargill and Stellantis announced layoffs.

The total number of Americans receiving unemployment benefits for the week of January 25 climbed to 1.89 million, an increase of 36,000 from the previous week.