Initial filings for unemployment insurance dropped to a seasonally adjusted 194,000 for the week ended October 17, the Labor Department reported Thursday.
The figure came in below expectations and sits just above the 189,000 reported for the week of July 18, which was the lowest level since September 1969.
Claims have averaged 212,000 over the past year, while the four-week moving average has fallen to 197,750, reflecting a sustained downward trend.
The data points to a labour market defined by a low-hire, low-fire dynamic, where employers are reluctant to cut workers even as broader hiring activity stays subdued.
Nonfarm payrolls rose by just 29,000 in September and have averaged a gain of only 69,000 a month in 2026, pointing to a notably sluggish pace of job creation.
The unemployment rate rose to 4.2%, an increase largely attributed to a sharp spike in labour force participation rather than a wave of dismissals.
Layoffs have remained modest, declining by 61,000 in August according to Bureau of Labor Statistics data, with the layoff rate falling to 1% of the total workforce over the prior 12 months.
“Despite extremely pessimistic views expressed in consumer confidence surveys regarding the economy overall, countless headlines describing job cuts from a variety of businesses, and the phantom job-stealing power of AI, the claims data suggests that labor market conditions are stable,” said Thomas Simons, chief U.S. economist at Jefferies, in a client note.
Federal Reserve officials are due to meet next week to issue their latest decision on interest rates, with policymakers characterising the labour market as a source of general strength.
The Fed’s attention has increasingly shifted toward persistent inflation, which has kept the pace of price increases well above the central bank’s 2% target for an extended period.
Markets expect the Fed to hold off on a rate hike in October but then to institute another quarter percentage point increase in December, adding further weight to the upcoming meeting.
The claims data also falls within the reference week that the Bureau of Labor Statistics uses to calculate its payrolls growth figures, meaning the reading could inform the October jobs report, due for release on November 6.