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The drop in weekly jobless claims highlights a labor market still defined by limited hiring but minimal firing, leaving consumer spending largely unaffected for now.

What Caught Our Eyes This Week

The “Curious Balance” Lives On

Weekly initial jobless claims notched back down to 218,000, reversing a brief spike to 264,000 earlier in September. Weekly claims are a widely followed high-frequency labor market indicator. They’re the closest thing to a real-time read on the labor market we have. After a quick scare, it appears the “no firing” side of the “no hiring, no firing” state of the labor market is still intact. Fed Chair Jerome Powell described it as a “curious balance.”

For most consumers, softer labor markets don’t matter until they matter—that is, when they (or people they know) start losing their jobs. Thankfully, evidence of widespread layoffs remains limited. Job creation is still tepid as companies continue to sit on the sidelines, but with the unemployment rate steady at 4.3%, a dearth of new jobs hasn’t been enough to make a meaningful dent in consumer spending on its own. No vicious cycle of weaker employment feeding weaker consumption feeding weaker employment just yet. We’ll get more data on the status of the curious balance in Friday’s Bureau of Labor Statistics employment report.

Weekly Initial Jobless Claims

CHART OF THE WEEK: Initial Claims, Number, Weekly, Seasonally Adjusted, Cerity Partners, FRED, 09/25/2025

Past performance does not guarantee future results.

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