New applications for US unemployment benefits declined last week, while planned layoffs also fell in September, pointing to continued stability in the labor market despite mounting economic pressures.

Initial claims for state unemployment benefits dropped by 1,000 to a seasonally adjusted 197,000 in the week ended September 26, the Labor Department said Thursday.

Economists polled by Reuters had expected claims to come in at 200,000.

Claims remain close to 57-year lows, suggesting companies are still reluctant to cut workers even as higher energy costs and geopolitical uncertainty weigh on businesses.

Economists said resilient domestic demand and solid corporate profit growth were helping shield workers from a broader wave of layoffs.

September layoffs decline

A separate report from outplacement firm Challenger, Gray & Christmas showed planned layoffs by US-based employers fell 18% to 43,281 in September.

Announced job cuts were also 20% lower than a year earlier.

Employers have announced 573,195 layoffs so far this year, a 39% decline from the first nine months of 2025.

Planned layoffs fell 43% in the third quarter, further underscoring the limited scale of job reductions despite uncertainty surrounding the economy.

However, the decline in layoffs has not translated into aggressive hiring.

Employers announced plans to hire 90,787 workers in September, sharply higher than the 12,325 planned hires announced in August.

But hiring intentions were still 23% below last year and represented the lowest September tally since 2011.

Challenger, Gray & Christmas said the usual seasonal increase in hiring that begins in September was absent.

“Companies are in a wait-and-see period right now,” said Andy Challenger, chief revenue officer at Challenger, Gray & Christmas.

“Employers are facing high energy costs, an uncertain war in Iran, a rate hike that could make hiring more expensive, plus the likelihood of surging healthcare costs.”

Fed policy adds to hiring uncertainty

The Federal Reserve last month raised its benchmark overnight interest rate by 25 basis points to a range of 3.75%-4.00%, its first rate increase in three years.

The central bank also indicated that further increases in borrowing costs could follow.

Higher interest rates can raise financing costs for companies, potentially making businesses more cautious about expanding their workforces.

The latest claims report showed continuing claims, which track people receiving unemployment benefits after their initial week of aid, fell by 11,000 to a seasonally adjusted 1.701 million in the week ended September 19.

Although continuing claims remain toward the lower end of their range this year, the data also indicate that some workers who lose their jobs are taking longer to find new employment.

Consumer confidence in jobs weakens

Other indicators suggest that labor-market conditions may be less comfortable for workers than the low level of initial claims implies.

A Conference Board survey showed the share of consumers describing jobs as “plentiful” fell in September to its lowest level since February 2021.

The proportion saying jobs were “hard to get” rose to its highest level in more than 5-1/2 years.

The weekly claims data do not directly feed into September’s employment report because the latest figures fall outside the survey period.

Economists surveyed by Reuters expect nonfarm payrolls to have increased by 90,000 in September, following a gain of 162,000 in August.

The unemployment rate is forecast to remain at 4.1% for a third consecutive month, although economists see risks skewed toward a higher reading.

Together, the indicators suggest a labor market characterized less by widespread job losses than by cautious hiring, with companies retaining workers while limiting the pace at which they add new employees.

The post US weekly jobless claims fall as layoffs decline, but hiring remains weak appeared first on Invezz