U.S. Jobless Claims Fall to 198,000 as Layoffs Stay Low Despite Weak Hiring

The Labor Department reported that initial claims for unemployment benefits fell by 9,000 to 198,000 for the week ending Jan. 10, 2026, well below economists’ expectations of 215,000 and signaling layoffs remain historically low. The four-week average dipped to 205,000 and continuing claims slid to 1.88 million, even as broader labor-market data show sluggish hiring and softening demand for workers. Employers added only 50,000 jobs in December and the unemployment rate edged down to 4.4%, while job openings fell to 7.1 million in November as businesses hold onto staff but hesitate to expand payrolls—a pattern economists label “low hire, low fire.” Fed Chair Jerome Powell has warned the job market may be weaker than it appears and suggested recent employment figures could ultimately be revised down enough to imply net job losses since the spring, when Trump’s latest tariff rounds hit. The Fed has already cut its benchmark rate three times in a row by a quarter point each to cushion the slowdown, and this mixed picture of steady layoffs but weak hiring will shape how far and how fast it continues easing.