USjobless claims drop more than expected

By Brittany Hayes 25/06/2026 2 min read 3 views

The number of Americans filing new claims for unemployment benefits fell more than expected last week, a sign that the labor market continues to hold up despite broader economic uncertainty. Initial claims dropped by 12,000 to a seasonally adjusted 215,000 for the week ended June 20, the Labor Department reported Thursday.

Economists had projected 225,000 claims.

Part of the larger-than-expected decline may reflect last Friday’s Juneteenth public holiday, which can distort the data. They also tend to be more volatile from late May through June as the school year ends. Some states allow non-teaching staff to file for jobless benefits during summer breaks, and the government’s seasonal adjustment model doesn’t always capture those shifts perfectly. The seasonal factors used to strip out regular fluctuations from the raw data are designed to account for predictable patterns, but the timing of school closures and the unique eligibility rules in certain states can introduce noise that the model misses.

Even so, the weekly numbers have been hovering near the upper end of this year’s range — between 190,000 and 230,000. There’s been no material change in the labor market’s overall trajectory, which regained its footing after a rough patch last year. Employers haven’t resorted to widespread layoffs, even as costs rise from the U.S.-led conflict with Iran. The war has contributed to surging costs for businesses, yet companies have so far avoided the kind of mass job cuts that often accompany such economic pressures.

But they remain cautious about hiring.

The number of people receiving benefits after an initial week of aid — a proxy for new jobs — rose by 21,000 to 1.821 million during the week ended June 13, the claims report showed. That so-called continuing claims period overlapped with the government’s household survey for June’s unemployment rate, which has held at 4.3% for three straight months. The continuing claims data serve as a gauge of how many individuals are still receiving unemployment payments after their first week, offering insight into the pace of rehiring.

The lack of strong recruitment has left many out-of-work people stuck in long spells of unemployment. The median duration of joblessness jumped to 11.6 weeks in May, the longest stretch since November 2021, up from 11.0 weeks in April, according to government data released earlier this month. Recent college graduates are also finding it hard to land entry-level positions. Companies are partly blamed for using artificial intelligence to fill some of those roles, a shift that leaves fewer opportunities for newcomers. The deployment of AI for tasks traditionally handled by entry-level workers has reduced the number of openings available to those just entering the workforce, compounding the difficulty for graduates seeking their first professional jobs.