The U.S. labor market is showing its most significant signs of strain in nearly four years, with the number of Americans continuing to draw unemployment benefits climbing to its highest point since November 2021.
Unemployment Numbers
According to the Department of Labor, continuing unemployment claims reached 1,972,000 during the week ended Aug. 9, up 30,000 from the prior week. That marks the highest level since the 2,041,000 recorded in November 2021.
The continued claims figure tracks Americans who have already filed an initial claim for jobless benefits, remained unemployed for at least a week and then filed again.
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The Department of Labor notes these figures provide a strong snapshot of overall labor market conditions. The rising continued unemployment claims suggests that displaced workers are struggling longer to secure new jobs.
On top of this, initial claims for unemployment benefits rose as well, increasing by 11,000 to 235,000 and exceeding economist expectations. The four-week moving average also edged higher, a sign of mounting pressure on the jobs front.
Interest Rates
Federal Reserve policy is at a pivotal moment as rising unemployment claims signal stress in the U.S. labor market.
Fed Chair Jerome Powell acknowledged that recent increases in both initial and continued unemployment claims reflect a softening job market.
“The situation suggests downside risks to employment are rising. And if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment,” Powell said on Friday.
Powell even hinted that suggested the Fed could consider cutting interest rates as soon as September if data continues to show labor market stress.
Upcoming Employment Reports
Upcoming employment reports will be watched closely for signs of further deterioration of the labor market.
The Department of Labor releases weekly unemployment claims data every Thursday at 8:30 a.m. ET, with the next release scheduled for Aug. 28.
The next monthly Employment Situation jobs report, covering August 2025 data, is scheduled to be released on Friday, Sept. 5 by the Bureau of Labor Statistics. The monthly report will provide updates on nonfarm payrolls, the unemployment rate and other key labor market measures.
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