Another week, another reminder that the American labor market is proving considerably harder to break than the gloom-and-doom crowd would like.
New applications for unemployment benefits fell to just 197,000 last week, according to the Labor Department, coming in 2,000 below the previous week’s revised figure and 3,000 below economists’ expectations.
That is not a collapsing labor market. It is remarkably resilient.
The four-week moving average, which provides a cleaner picture by smoothing out weekly swings, dropped to 198,000. Aside from two readings in 2022, claims have not averaged that low since 1969—nearly six decades ago.
For American workers, the message is straightforward: Employers are still holding on to their people.
That resilience is particularly notable given the economic pressures facing households and businesses. Inflation remains a concern, gasoline prices have climbed amid the war involving Iran, and the Federal Reserve has spent years wrestling with the consequences of elevated prices.
Yet consumers continue spending, businesses are investing, corporate profits remain strong and the stock market is reaching record highs.
The labor market is helping keep that economic engine running.
The number of Americans continuing to receive unemployment benefits after their initial week did rise by 17,000 to a seasonally adjusted 1.716 million for the week ending September 26. But that increase does not change the broader picture coming from initial claims, which remain exceptionally low.
There is another factor worth watching: the supply of workers itself.
The labor force is growing more slowly as millions of baby boomers retire. Immigration has also slowed as the Trump administration has stepped up enforcement of federal laws against illegal entry.
That combination means employers are operating in a labor market where workers remain valuable—and where replacing people who leave is not necessarily easy.
The Federal Reserve's September meeting minutes offered another important signal. Officials described the labor market as “close to maximum employment,” while the unemployment rate stood at 4.2%, matching the Fed officials' median estimate of the longer-run rate consistent with its 2% inflation objective.
That is a far cry from the picture of an economy on the verge of collapse.
For years, Americans have repeatedly been told that the next crisis is just around the corner. But the numbers keep demanding a more complicated—and considerably more optimistic—story.
Businesses are still hiring. Workers are still working. Consumers are still spending.
And with jobless claims hovering near levels last seen when Richard Nixon was president, the American economy is once again showing why raw economic data can tell a very different story from the prevailing political narrative.
The bottom line is difficult to miss: despite inflation, geopolitical turmoil and years of economic uncertainty, American workers remain employed at historically strong levels. For an America First administration focused on rebuilding domestic strength, keeping that momentum alive will be one of the most important economic tests ahead.
