WASHINGTON — Fewer Americans applied for unemployment aid last week as layoffs remain low despite economic headwinds that are creating uncertainty for businesses.
U.S. applications for unemployment benefits in the week ending June 20 fell by 12,000 to 215,000, the Labor Department reported Thursday. That’s fewer than the 225,000 new applications forecast by analysts surveyed by the data firm FactSet.
Weekly filings for unemployment benefits are considered representative of U.S. layoffs and are close to a real-time indicator of the health of the job market.
Despite concerns that the war in Iran would trip up an already wobbly labor market, hiring has picked up in recent months following a miserable 2025 that saw fewer than 200,000 job gains. For comparison, about 1.5 million jobs were added in 2024.
U.S. employers delivered a surprising 172,000 new jobs in May and the economy is averaging 188,000 job gains in the three months since the Iran war began in late February. That’s the best three months of hiring since early 2024. The unemployment rate remains historically low at 4.3%.
The government issues its June jobs report next week.
Job openings also rose in April as employers posted 7.6 million vacancies, up from 6.9 million in March and the most since May 2024.
The government also reported Thursday that the Federal Reserve’s preferred inflation gauge rose to a new three-year high in May as gas prices peaked due to the closure of the Strait of Hormuz off Iran’s southern border, where one-fifth of the world’s oil typically passes every day.
With inflation still well above the Federal Reserve’s 2% target, officials at the U.S. central bank left the benchmark interest rate at its most recent meeting last week.
Lower interest rates can boost the economy and hiring, but also tend to stoke inflation, leading a number of Fed policymakers to say they are actually willing to consider at least one interest rate hike this year.
That could potentially help bring inflation down, but higher borrowing costs generally make businesses more reluctant to hire.
The Federal Reserve has signaled that it could raise interest rates at least once before the end of the year. Wall Street sees an 85% chance that the central bank will raise its benchmark interest rate this year, according to data from CME Group.
Optimism over artificial intelligence has also injected a degree of uncertainty about the job market due to the investment required to develop it and because the powerful technology could alter or even replace some jobs.
Among the companies that have cut jobs recently are Verizon, UPS, Amazon, Disney, Starbucks and Walmart.
Weekly jobless aid applications have stabilized in a range mostly between 200,000 and 250,000 since the U.S. economy emerged from the pandemic recession. However, hiring began slowing about two years ago and tapered further in 2025 due to President Donald Trump’s tariffs, his purge of the federal workforce and the lingering effects of high interest rates meant to control inflation.
Thursday’s report showed that the four-week moving average of unemployment claims, which evens out some of the weekly volatility, rose by 750 to 224,250.
The total number of Americans filing for unemployment benefits for the previous week ending June 13 increased by 21,000 to 1.82 million.