Companies are hanging onto staff even while adding fewer workers. New unemployment claims eased to 194,000 in the week ended Oct. 17, extending an already subdued run and sitting close to the 189,000 seen in the week of July 18, the lowest mark since September 1969. Over the past 12 months, claims averaged 212,000, and the four-week average is 197,750.
This claims print falls in the period the BLS uses to benchmark monthly payroll growth. The October jobs report is due Nov. 6.
Hiring is sluggish. Nonfarm payrolls increased by 29,000 in September and have averaged 69,000 a month so far in 2026. The unemployment rate moved up to 4.2%, largely because labor force participation jumped.
Layoffs remain limited. BLS data released Sept. 29 showed August layoffs down by 61,000, and over the past year the layoff rate, as a share of the workforce, slipped to 1%, a decline of 0.2 percentage point. Job openings were mostly unchanged over that span.
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Fed officials convene next week for their latest rate decision. Recent commentary has framed the labor market as generally solid, while placing more attention on stubborn inflation that still runs above the 2% goal. Futures markets point to no change in October, with another quarter percentage point increase anticipated in December.
Why does that matter? Rate moves feed through to Treasury yields, borrowing costs, and equity valuations. Low claims with tepid hiring can keep the Fed focused on inflation, not jobs, which keeps policy sensitive to price data into year end.
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