Unemployment Rates Drop To Historically Low Level

The number of Americans applying for unemployment benefits fell last week, the Labor Department said Thursday, a sign that companies aren’t cutting many jobs.

Jobless claims for the week ended June 21 dropped 10,000 to 236,000, a historically-low level. The four-week average of claims, which smooths out weekly volatility, dipped 750 to 245,000.

Applications for unemployment aid are a proxy for layoffs, and so the decline is evidence that businesses are mostly holding onto their employees. Yet separate data suggests hiring also remains cool, in what economists are referring to as a “no hire, no fire” job market.

The unemployment rate remains low, though there are signs that the economy is slowing. So far this year, employers have added a solid but unspectacular 124,000 jobs a month, down from an average 168,000 last year. Most of the hiring has been concentrated in a few industries, specifically health care, restaurants and hotels, and government. Layoffs have mostly remained low, but hiring has also been weak.

Yet for many job-seekers, the sluggish creation of new jobs has been a challenge. Recent college graduates are facing the toughest job market in more than a decade. The unemployment rate for grads aged 22 to 27 is now higher than the overall jobless rate, and the gap between the two is the widest it has been in more than 30 years.

The difficulty many of the unemployed are having in finding work can be seen in the number of people continuing to claim unemployment aid, which rose 37,000 to 1.97 million for the week ending June 14. That is the most since November 2021.