U.S. Jobless Claims Jump to 263,000 — Highest Level Since 2021

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U.S. Jobless Claims Jump to 263,000 — Highest Level Since 2021/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. jobless claims spiked to 263,000 last week, the highest in nearly four years, signaling growing cracks in the labor market. Revised federal data also slashed nearly a million jobs from earlier reports, underscoring weaker growth. Economists warn that President Trump’s tariffs and trade policies may be adding to business uncertainty as the Fed weighs rate cuts.

Hiring sign is displayed in Northbrook, Ill., Sept. 21, 2022. The number of Americans applying for unemployment benefits fell last week and remains historically low even as the U.S. economy slows in the midst of decades-high inflation. Jobless claims for the week ending Oct. 15 declined by 12,000 to 214,000 from 226,000 last week, the Labor Department reported Thursday, Oct. 20, 2022. (AP Photo/Nam Y. Huh)

Quick Look

Jobless claims: 263,000, highest since Oct. 2021
Forecast: Economists expected 231,000
4-week average: 240,500 (+9,750)
Continuing claims: 1.94 million (unchanged)
BLS revision: 911,000 fewer jobs than reported in March
Growth: U.S. economy slowed to 1.3% in first half of 2025
Fed outlook: Expected to cut rates next week
Policy impact: Trump’s tariffs seen as driver of hiring slowdown

WASHINGTON — September 11, 2025 — Jobless claims in the United States surged last week to their highest level in nearly four years, signaling renewed pressure on the labor market as hiring slows and business confidence falters.

The Labor Department reported Thursday that 263,000 Americans filed for unemployment benefits in the week ending Sept. 6 — up 27,000 from the prior week and well above the forecast of 231,000. It marks the largest number of claims since October 2021.

Key Takeaways

Weekly unemployment claims rose to 263,000 — the highest in almost 4 years.
Four-week average climbed to 240,500, indicating a sustained upward trend.
Continuing claims held steady at 1.94 million, showing more Americans remain on benefits.
The surge follows a Bureau of Labor Statistics revision that cut 911,000 jobs from earlier employment reports.
Economists warn that Trump’s tariffs and trade policies may be deepening uncertainty for businesses.

Why Jobless Claims Matter

Jobless claims are considered a real-time indicator of layoffs. Historically, they have stayed between 200,000 and 250,000 since the U.S. economy began recovering from the pandemic. The sudden spike above that range suggests the job market is softening.

“Hiring has slowed dramatically — companies aren’t letting huge numbers of workers go, but they’re not adding new jobs either,” said one analyst, describing the trend as “no hire, no fire.”

Revised Data Shows Weaker Job Growth

Earlier this week, the BLS released revised figures that cut previously reported job gains by 911,000 for the year ending in March 2025.

Hardest-hit sectors: leisure and hospitality, retail, and professional services.
The revision shows the slowdown began before Trump’s April tariffs escalated trade uncertainty.
Final revisions will be published in February 2026.

In August, the U.S. economy added just 22,000 jobs, far below the 80,000 forecast, deepening worries about recession risks.

Job Openings Shrink

Job postings fell to 7.2 million in July, marking the first time since 2021 that unemployed Americans outnumbered available positions.

This shift highlights how quickly demand for workers is fading, despite historically low layoff levels.

Trump’s Economic Policies in Focus

President Donald Trump’s sweeping tariffs on imports remain a flashpoint for economists, who argue they have slowed hiring and investment:

Growth fell to 1.3% annualized in the first half of 2025, compared to 2.5% in 2024.
Companies have delayed expansion projects due to trade uncertainty.
Critics say Trump’s attacks on the credibility of government job data — including firing the BLS chief in August — have undermined confidence.

Federal Reserve Response

The labor market slump strengthens the case for the Federal Reserve to cut interest rates at its meeting next week.

Lower rates would ease borrowing costs for mortgages, auto loans, and businesses.
But economists caution that aggressive cuts could fuel inflation, already above the Fed’s 2% target.

Fed Chair Jerome Powell has signaled a more cautious path, but markets are betting on at least a quarter-point cut.

By the Numbers

Initial claims: 263,000 (+27,000)
4-week average: 240,500 (+9,750)
Continuing claims: 1.94 million (unchanged)

Outlook

With jobless claims at a four-year high, job creation slowing, and trade tensions adding uncertainty, the U.S. labor market is flashing warning signs. Whether the Fed’s expected rate cut can stabilize conditions remains to be seen.