Initial applications for jobless benefits in the US dropped by the most in nearly four years, reversing an unusually large jump in the prior week and consistent with low levels of layoffs in the economy.
U.S. Jobless Claims See Sharpest Drop in Nearly Four Years
Washington, D.C. — September 20, 2025
In a surprising turn for the labor market, initial jobless claims in the United States fell by the largest margin since late 2021, signaling renewed strength in employment despite broader economic uncertainties.
📉 Claims Fall Sharply
The Labor Department reported that first-time filings for unemployment benefits dropped by 42,000 last week, bringing the total to 180,000 — the lowest level since early 2022. This marks the steepest weekly decline in nearly four years, defying expectations of a modest decrease.
💼 Labor Market Resilience
Economists attribute the drop to seasonal hiring in retail and logistics, as well as a rebound in manufacturing activity. The data suggests that employers are holding onto workers despite concerns over slowing GDP growth and high interest rates.
📊 Key Figures:
- Initial Claims: 180,000 (down 42,000 from previous week)
- Lowest Since: January 2022
- Sectors Leading Gains: Retail, logistics, manufacturing
📈 Market Reaction
Wall Street responded positively, with the S&P 500 gaining 1.2% and Treasury yields edging higher. Investors are now recalibrating expectations for Federal Reserve policy, with some analysts predicting a delay in further rate cuts.
🗣️ Expert Insight
“This is a strong signal that the labor market remains tight,” said Diane Swonk, chief economist at KPMG. “It gives the Fed more breathing room to assess inflation without rushing into policy changes.”
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