US Jobless Claims Drop to Lowest Level in 3 Months

Recurring jobless claims ticked up as workers may be finding it harder to get new jobs.

A hiring ad displayed at a coffee shop in Kerrville, Texas, on July 9, 2025. Madalina Kilroy/The Epoch Times

The number of Americans filing for new unemployment benefits declined for the fifth consecutive week to a three-month low as the U.S. labor market continues to perform at a solid pace.

Initial jobless claims declined by 7,000 to 221,000 for the week ending July 12, according to the Department of Labor.

This is down from an upwardly adjusted 228,000 in the previous week and represents the lowest level since mid-April.

The four-week average, which strips out the week-to-week volatility, tumbled to 229,500 from 235,750.

Jobless claims filed by former federal workers surged by 158 to 596, up 85 percent from a year ago.

Economists have been monitoring this statistic closely to determine the effects of the current administration’s policy actions.

Recurring jobless claims—a measure of the number of out-of-work individuals currently receiving unemployment benefits—ticked up to 1.956 million from a downwardly revised 1.954 million.

Despite concerns that President Donald Trump’s tariffs would weigh on the U.S. economy and job market, recent data indicate that employment conditions remain solid.

“On the employment front, the most recent data show a solid labor market, as demonstrated by measures of unemployment, employment, vacancies, hiring, and quits,” New York Federal Reserve President John Williams said in a speech at a July 16 New York Association for Business Economics event.

The June unemployment rate decreased to 4.1 percent. The economy also added 147,000 new jobs, higher than the consensus forecast of 110,000.

Earlier this month, the Bureau of Labor Statistics reported that job openings surged to 7.77 million in May. Job quits, which can signal workers’ confidence in finding a new position, rose by 78,000 to 3.293 million.

Layoffs have also generally trended lower since April.

Planned job cuts totaled 47,999 in June, the lowest of the year so far, according to global outplacement firm Challenger, Gray and Christmas.

“The bulk of companies cited economic conditions last month. We saw some DOGE activity and have tracked over 2,000 jobs directly attributed to tariffs this year, but for the most part it was a quiet June,” Andrew Challenger, the company’s senior vice president, said in the report.

Cautious Optimism

As the global trade situation stabilizes, a growing sense of optimism has emerged among businesses—both large and small—in recent weeks.

The latest CEO Confidence Index revealed that executives have increased their confidence levels in both current and future business conditions. CEOs also anticipate that conditions will improve over the next 12 months.

Last month’s National Federation of Independent Business’s Small Business Optimism Index held steady as uncertainty diminished.

“Taxes remain the top issue on Main Street, but many others are still concerned about labor quality and high labor costs,” NFIB Chief Economist Bill Dunkelberg said in a July 14 statement.

The Kansas City Fed’s Labor Market Conditions Indicator signaled that employment activity levels increased and remained above its historical average.

The Beige Book—the U.S. central bank’s periodic report that summarizes economic conditions across its 12 districts—highlighted that employment expanded slightly overall.

While optimism has improved from recent lows among companies, hiring plans have stalled.

“Hiring remained generally cautious, which many contacts attributed to ongoing economic and policy uncertainty,” the Federal Reserve Bank of Boston stated in the July report. “Labor availability improved for many employers, with further reductions in turnover rates and increased job applications.”

This could explain why continuing jobless claims remain near their highest levels in nearly four years.

“Interestingly, continuing jobless claims have ticked slightly higher, suggesting that finding a new job has become more difficult,” Bill Merz, head of capital markets research at U.S. Bank Asset Management Group, said in a note.

The long-term unemployment rate—the number of those who have been jobless for 27 weeks or longer as a percent of total unemployed people—climbed to 23.3 percent in June from 20.4 percent in the previous month.