US jobless claims rise slightly amid stable but cautious labor market

U.S. jobless claims rose marginally in the week ended August 29, climbing by 2,000 to a seasonally adjusted 206,000, according to Labor Department data. Economists had anticipated 205,000 claims, with the figure remaining within the annual range of 189,000 to 230,000. Continuing claims, a proxy for ongoing unemployment, increased by 8,000 to 1.779 million for the week ended August 22, reflecting a broader trend of cautious labor market activity. Despite this, hiring intentions have shown some resilience, with companies announcing a 37% increase in planned hires in the first eight months of 2025 compared to the same period in 2024. However, job cuts surged by 58% to 52,881 in August, though total announced layoffs for the year remain 41% lower than in 2023. Economists had forecasted a rebound of 56,000 jobs in August after a decline of 23,000 in July, with the unemployment rate expected to hold steady at 4.1%. Analysts describe the labor market as a "slow hire, slow fire" environment, with Federal Reserve officials noting that while demand remains healthy in manufacturing, construction, and some service sectors, retail and hospitality sectors have seen reduced labor demand. The Federal Reserve’s Beige Book for August highlighted that employment growth was "very slight" in August, with mixed signals across sectors. The data comes amid expectations that the Federal Reserve may raise interest rates as early as September to address inflation pressures tied to trade policies and geopolitical tensions, including the U.S.-led conflict in Iran. Recent policy shifts, such as the ending of Temporary Protected Status for Haitian workers, have also contributed to labor market volatility, potentially affecting hiring authorization and workforce stability.