Hiring slows to 37,000 a month as layoffs hit 1969 low

The number of Americans filing new claims for unemployment benefits fell to 187,000 for the week ending July 18, the Labor Department reported on July 23, the lowest reading since September 1969. The figure was down 22,000 from the prior week and marked the largest one-week decline in roughly three months. Economists surveyed by Reuters had expected first-time filings to rise to about 212,000. Continuing claims, a measure of how long people stay on benefits, fell to 1.796 million for the week ending July 11, a six-week low.

The claims data measure layoffs, not hiring, and the two have moved in different directions. From January 2025 through June 2026, employers added an average of just 37,000 jobs a month, down from more than 200,000 a month over the previous three years, according to U.S. Bank. The national unemployment rate eased to 4.2 percent in June, a one-year low, though selfemployed.com reported that the decline owed more to a shrinking workforce than to a hiring boom.

Economists have a name for the arrangement. Former Federal Reserve Chair Jerome Powell described it as a low-hire, low-fire economy, a phrase U.S. Bank used in a July 24 analysis of the labor market. In that account, companies are holding on to the workers they have while hesitating to add new ones, and the low level of layoffs has kept unemployment from climbing even as job creation slows. The bank called the market stable but increasingly defensive.

The gap between demand for workers and actual hiring widened in June. There were 7.4 million job openings that month but only 5.3 million hires, according to figures from the Bureau of Labor Statistics cited by jobsnhire.com on August 6. Layoffs held roughly flat at 1.8 million. The publication described the result as a low-hiring, low-firing environment in which companies keep their existing staff but close the door to new entrants, a pattern it called stagnation amidst stability.

A stable but defensive market

Rob Schoeppner, an economist at U.S. Bank, said the slower pace of labor-force growth explained part of the divergence, because fewer new workers means employers need to create fewer jobs to keep unemployment steady. He said both companies and workers had grown reluctant to make big changes, whether that meant hiring, quitting or switching roles. The overall effect, in his description, was a market that had held its footing while losing much of the movement that defined it a few years earlier.

Low layoffs have done most of the work of keeping the market on stable footing, Schoeppner said. When employers avoid cutting jobs, even a thin pace of hiring can be enough to hold unemployment in place. He cautioned that the same arithmetic works in reverse: because hiring is so slow, a modest rise in layoffs could push the jobless rate higher faster than usual. That sensitivity, he said, is the risk beneath a market that looks calm on the surface.

Employers still have positions to fill, but both workers and businesses appear increasingly reluctant to make major moves. The result is a labor market that remains stable, but considerably less dynamic than it was just a few years ago.

The continuing-claims figure offers a rough read on how quickly people who lose jobs find new ones. Its fall to 1.796 million, reported for the week ending July 11, suggested that those out of work were returning to payrolls somewhat faster than in preceding weeks, according to selfemployed.com. That reading sits awkwardly against the hiring slowdown, and the two data sets cover different weeks. Taken together, they point to a market where separations are rare and new openings are filled slowly.

Interest rates and the Fed

A labor market this tight bears on the Federal Reserve's next moves. Low layoffs and firm wage growth are the conditions that keep the central bank focused on inflation rather than on supporting employment, selfemployed.com reported, which gives it room to hold interest rates higher for longer. Rates that stay elevated raise the cost of the credit lines and business loans that many self-employed people rely on. The reporting did not say when the Fed would next set rates.

The stability has not reached everyone. The number of people unemployed for 27 weeks or longer rose to 1.9 million, or 27.3 percent of all unemployed workers, according to jobsnhire.com. The publication said prolonged joblessness erodes professional skills and makes returning to work progressively harder, raising the risk of a cycle of structural unemployment. In a market where companies rarely hire from outside, the people already outside it face the steepest barrier, and the low headline claims number does not capture their situation.

For the self-employed, the same numbers carry a mixed message. Steady employment keeps consumers spending and client budgets funded, selfemployed.com reported, which supports demand for freelance and contract work. Independent workers who serve corporate clients, such as consultants and freelance marketers, often feel shifts in the labor market first, because a company's confidence in its own staffing drives its decisions about outsourcing. The same firm caution that is slowing hiring, in that reading, can reach the contractors those firms would otherwise engage.

Where hiring stands now

Recent figures suggest hiring conditions may be steadying after a long slowdown, though the evidence for a sustained pickup remains thin, U.S. Bank said in its July 24 analysis. The bank's reading is that the market has stopped deteriorating without yet turning back up. That leaves the current pattern, few layoffs and few new hires, as the most likely near-term description of the job market rather than a return to the faster growth of the early 2020s. The bank did not forecast when hiring might reaccelerate.

A shrinking pool of available workers runs through the picture. The drop in June's unemployment rate to 4.2 percent reflected a smaller workforce more than stronger hiring, selfemployed.com reported, and jobsnhire.com listed a falling labor-force participation rate among the strains beneath the headline stability. When fewer people are working or looking for work, the same low unemployment rate can describe a weaker underlying market. That dynamic is part of why economists have leaned on layoff data to gauge the market's health this year.

The risk beneath the calm

The arrangement holds only as long as layoffs stay low. Schoeppner warned that even a modest increase in job cuts could lift unemployment, because the slow pace of hiring leaves little room to absorb newly displaced workers. Jobsnhire.com framed the same point as a set of hidden risks, chief among them the widening gap between openings and hires and the growing ranks of the long-term unemployed. None of the sources reviewed put a probability on such a shift or named a trigger that would set it off.

So far, persistently low layoffs have served as a stabilizing force. When layoffs remain contained, even modest job growth can be enough to keep the labor market on steady footing.

For now, the weekly claims data describe a labor market with very few layoffs, a reading that reached its lowest point in more than half a century. Weekly figures are volatile and can be revised, and the July 18 number covers a single week. What the sources agree on is the shape of the market rather than its direction. It is stable on the surface and slow underneath, and it would weaken quickly if layoffs began to climb. When that might happen, none of them said.