US jobless claims edged only slightly higher in the first week of 2026, offering fresh evidence that layoffs remain limited even as the labour market shows signs of cooling.
About 208,000 Americans filed new claims for unemployment benefits in the week ended Jan. 3, up from 200,000 a week earlier, according to data released by the Labor Department on Thursday.
The figure came in below economists’ expectations of 210,000, suggesting underlying labour market resilience despite broader economic uncertainty.
Claims data has been volatile in recent weeks as seasonal adjustments struggle to fully account for the year-end holiday period.
Even so, initial claims remain near the lower end of levels seen over the past year, reinforcing the view that employers are largely holding on to their existing workforces.
Hiring slowdown keeps labour market in stalemate
While layoffs have stayed historically low, hiring momentum has weakened sharply.
Employers, facing tariff-related uncertainty and rapid advances in artificial intelligence, have been reluctant to expand headcount.
Rather than widespread job cuts, the labor market has slipped into what economists describe as a low-hire, low-fire environment.
Continuing claims, which measure the number of people receiving unemployment benefits beyond an initial week, rose to 1.91 million in the week through Dec. 27, from 1.86 million previously.
These figures, which lag initial claims by a week, point to growing difficulty among job seekers in finding new work.
The weekly claims data has been among the strongest indicators that the labor market has not entered a period of mass layoffs, even as other measures hint at a slowdown.
With recruiting activity muted, many unemployed workers are experiencing longer spells without work, adding to household and policy concerns.
Layoff announcements surge despite stable claims
In contrast to the relatively calm claims data, a separate report from outplacement firm Challenger, Gray & Christmas showed a sharp rise in planned job cuts.
US-based employers announced 1.206 million layoffs in 2025, up 58% from the previous year and the highest total in five years.
Cost-cutting by federal agencies and technology companies accounted for most of the announced reductions.
The tech sector, in particular, continues to restructure as firms accelerate the adoption of artificial intelligence tools.
“Technology has been pivoting to both developing and implementing artificial intelligence much more quickly than any other industry,” said Andy Challenger, chief revenue officer at Challenger, Gray & Christmas, citing years of over-hiring as a key contributor to job losses.
Weak hiring and fewer job openings add pressure
Hiring plans fell 34% last year to 507,647, the lowest level since 2010, according to the Challenger report.
That decline is contributing to a rise in long-term unemployment, as reflected in the increase in continuing claims.
Additional data released this week showed job openings fell to a 14-month low in November.
There were just 0.91 job openings for every unemployed person, down from 0.97 in October and the lowest ratio since March 2021.
All eyes now turn to Friday’s December jobs report.
Economists expect payroll growth of 73,000 jobs, with the unemployment rate edging down to 4.5%, offering a fuller picture of whether the labor market is stabilising or slipping further into a slowdown.
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