Weekly Jobless Claims Reach Almost 4-Year High, Adding to Labor Market Woes

01:12 PM EDT, 09/11/2025 (MT Newswires) -- Weekly applications for unemployment insurance in the US hit a nearly four-year high, government data showed Thursday, adding to signs that have ignited fears about a slowdown in the labor market.

For the week ended Sept. 6, the seasonally adjusted number of initial claims increased to 263,000, its highest reading since Oct. 23, 2021, the Department of Labor said. The consensus was for a 235,000 print in a Bloomberg poll. The previous week's reading was revised down by 1,000 to 236,000.

The four-week moving average for initial claims totaled 240,500, rising by 9,750 from the prior week's downwardly revised average, DOL data showed Thursday.

"Initial claims have trended higher over the last several weeks, hinting at a pickup in layoffs," Oxford Economics Lead US Economist Nancy Vanden Houten said in remarks e-mailed to MT Newswires. "The latest jobless claims data, along with other recent labor market indicators, show signs of a more vulnerable job market and will lead the Federal Reserve to lower interest rates at its meeting next week."

Last week, Bureau of Labor Statistics data showed that US nonfarm payrolls rose by 22,000 in August, well below the 75,000 increase that Wall Street had expected. On Tuesday, the government agency revised down nonfarm payrolls growth by 911,000 for the year through March.

On Wednesday, the DOL's internal watchdog said it was launching a review of potential issues around the BLS' key jobs and inflation data.

Seasonally adjusted continuing claims came in at 1.94 million for the week ended Aug. 30, below the Street's views for a 1.95 million reading. Continuing claims were unchanged from the previous week's downwardly revised level. The four-week moving average fell by 750 to 1.95 million from the prior week's downwardly revised average, according to the DOL.

Government data showed Thursday that US consumer inflation accelerated at the fastest pace in seven months in August, while the annual core rate remained above 3%.

Last month, Fed Chair Jerome Powell indicated a potential monetary policy pivot to lower rates. At the time, he said downside risks to employment were rising, while the effects of tariffs on inflation would likely be short lived.

The probability that the US central bank will reduce its benchmark lending rate by 25 basis points next week fell to about 89% Thursday from 91% Wednesday, while the odds of a 50-basis-point cut rose to 11% from 8.9%, according to the CME FedWatch tool.

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