Jobless claims in the U.S. reach highest level since 2021
TOI World Desk | TOI Global Desk | Sep 11, 2025, 20:59 IST
Unemployment claims in the U.S. rose to 263,000 last week, the highest level since 2021, signaling labor market weakness. The increase strengthens expectations that the Federal Reserve will cut interest rates next week, though elevated inflation complicates policy decisions.
Increasing numbers of Americans are seeking unemployment benefits, providing fresh indications of difficulty in the labor market. Claims last week hit their highest level in nearly four years.
The Labor Department said Thursday that 263,000 individuals filed for unemployment benefits for the week ended Sept. 6. This is 27,000 more than last week and far better than the 231,000 economists forecast. The four-week moving average, which smooths out spiking, also rose to 240,500.
The jump in claims adds to other evidence that the job market is slowing. A recent government report found that U.S. employers added 911,000 fewer jobs than first reported for the year ending in March 2025. Job losses were most noticeable in hospitality, retail, and business services.
Because of the weak job market, experts believe the Federal Reserve will likely cut interest rates next week to try to support the economy. However, rising prices — also known as inflation — make this decision complicated. Lowering rates can boost growth, but it can also make inflation worse.
“The hot inflation report probably won’t stop the Fed from cutting rates in September, but it may cause them to wait in October if inflation doesn’t look under control,” said Jeffrey Roach, chief economist at LPL Financial.
Other recent signs also verify the slowdown. The economy created just 22,000 jobs in August, much lower than the anticipated 80,000. Job vacancies fell to 7.2 million in July. It is the first time since 2021 that there were more unemployed workers than job openings.
Economic expansion also slowed, with America expanding at only 1.3 percent in the first half of 2025 as opposed to 2.5 percent during the previous year. Most analysts attribute the continued uncertainty brought on by President Donald Trump's trade tariffs to a reluctance by companies to invest and hire.
In spite of additional individuals applying for benefits, the number of Americans who are receiving unemployment benefits remained constant at 1.94 million for the week through Aug. 30. Until recently, jobless claims had remained between 200,000 to 250,000 since the pandemic recovery from COVID-19.
The Labor Department said Thursday that 263,000 individuals filed for unemployment benefits for the week ended Sept. 6. This is 27,000 more than last week and far better than the 231,000 economists forecast. The four-week moving average, which smooths out spiking, also rose to 240,500.
The jump in claims adds to other evidence that the job market is slowing. A recent government report found that U.S. employers added 911,000 fewer jobs than first reported for the year ending in March 2025. Job losses were most noticeable in hospitality, retail, and business services.
Because of the weak job market, experts believe the Federal Reserve will likely cut interest rates next week to try to support the economy. However, rising prices — also known as inflation — make this decision complicated. Lowering rates can boost growth, but it can also make inflation worse.
“The hot inflation report probably won’t stop the Fed from cutting rates in September, but it may cause them to wait in October if inflation doesn’t look under control,” said Jeffrey Roach, chief economist at LPL Financial.
Other recent signs also verify the slowdown. The economy created just 22,000 jobs in August, much lower than the anticipated 80,000. Job vacancies fell to 7.2 million in July. It is the first time since 2021 that there were more unemployed workers than job openings.
Economic expansion also slowed, with America expanding at only 1.3 percent in the first half of 2025 as opposed to 2.5 percent during the previous year. Most analysts attribute the continued uncertainty brought on by President Donald Trump's trade tariffs to a reluctance by companies to invest and hire.
In spite of additional individuals applying for benefits, the number of Americans who are receiving unemployment benefits remained constant at 1.94 million for the week through Aug. 30. Until recently, jobless claims had remained between 200,000 to 250,000 since the pandemic recovery from COVID-19.