US jobless claims drop to 197,000 ahead of September jobs report

Fewer Americans filed for unemployment benefits last week as initial jobless claims fell to 197,000, the lowest level since mid-July, according to data released Thursday by the Labor Department.

The figure was below the revised 198,000 claims recorded the previous week, while the four-week moving average also fell to 202,250.

Continuing claims edged up to 1.7 million in the prior week, while the insured unemployment rate stayed at 1.1%. Unadjusted initial claims rose 6.7% to 163,811, broadly in line with seasonal expectations.

Jobless claims, a measure closely watched as a proxy for layoffs, have largely stayed below 220,000 in 2026, despite a slower pace of hiring. Employers have been adding an average of 80,000 jobs a month this year, with August producing a stronger-than-expected 162,000 jobs.

Investors are awaiting the September US jobs report on Oct. 3 after August nonfarm payrolls came in at 22,000, far below expectations, while unemployment rose to 4.3%. The report will also provide updated figures on wage growth and broader unemployment.