Key facts
- Initial claims for state unemployment benefits rose 1,000 to 199,000 for the week ended August 1.
- Planned job cuts by U.S. employers dropped 27% to 33,429 in July, the lowest since July 2024.
- The number of people receiving unemployment benefits increased 24,000 to 1.801 million for the week ended July 25.
- Announced hiring plans jumped 47% in July to 16,095.
The number of Americans filing claims for unemployment benefits rose slightly last week, while planned layoffs by U.S. employers dropped to a two-year low in July. Initial claims for state unemployment benefits increased by 1,000 to a seasonally adjusted 199,000 for the week ended August 1, according to the Labor Department. Economists had forecast 202,000 claims. Layoffs have remained low despite economic shocks, with job losses largely confined to the technology sector due to artificial intelligence advancements.
A separate report from Challenger, Gray and Christmas indicated that planned job cuts fell 27% in July to 33,429, the lowest since July 2024, and were down 41% year-to-date. "The pace of layoffs fell dramatically this summer," said Andy Challenger, chief revenue officer at Challenger, Gray and Christmas, noting that tech and AI remain primary drivers of announced layoffs.
The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased by 24,000 to 1.801 million in the week ended July 25. Meanwhile, announced hiring plans jumped 47% in July to 16,095, though this increase was from a low base. Companies have announced plans to hire 107,500 workers year-to-date, up 25% from the same period in 2025.
Economists suggest the stable labor market provides the Federal Reserve room to address inflation concerns stemming from the Middle East conflict. The central bank recently maintained its benchmark interest rate between 3.50%-3.75%, though three policy-setting members favored a quarter-percentage-point hike. The closely watched July employment report is due Friday, with economists forecasting an 80,000 job increase and the unemployment rate holding steady at 4.2%. However, a recent Conference Board survey showed consumer views on job availability declined in July.