U.S. Jobless Claims Rise Slightly, Pointing to a Steady but Cautious Labor Market

New filings for U.S. unemployment benefits edged higher last week, but by far less than expected, reinforcing signs that the labor market is holding steady as 2026 begins.

Initial claims for state jobless aid increased by just 1,000 to a seasonally adjusted 200,000 for the week ended January 17, according to data released Thursday by the Labor Department. Economists had forecast a larger rise to 210,000.

While seasonal adjustments around the year-end holidays have made recent readings volatile, the broader trend remains intact. The labor market continues to operate in what economists describe as a “low-hiring, low-firing” environment—where companies are reluctant to lay off workers, but equally cautious about expanding headcount.

Analysts say uncertainty stemming from President Donald Trump’s aggressive trade and immigration policies has dampened both labor demand and supply. At the same time, businesses are reassessing workforce needs as investment in artificial intelligence accelerates, further restraining hiring.

The latest claims data cover the period used to compile January’s nonfarm payrolls report. Payroll growth slowed in December, with just 50,000 jobs added—roughly in line with the 2025 monthly average, but well below levels seen in earlier years.

Looking ahead, the Bureau of Labor Statistics is expected to reveal a notable loss of momentum when it publishes its annual benchmark revision next month. The agency has already estimated that around 911,000 fewer jobs were created in the 12 months through March 2025 than previously reported. Much of the discrepancy has been attributed to the “birth-death” model used to estimate job creation from new and closing firms—an approach that will be revised starting with the January report.

Meanwhile, continuing claims—a proxy for how quickly laid-off workers find new jobs—fell by 26,000 to 1.849 million in the week ended January 10. Part of this decline likely reflects benefit exhaustion, as eligibility is capped at 26 weeks in most states.

Surveys suggest that displaced workers are still struggling to secure new positions, underscoring the cautious tone of a labor market that remains resilient, but far from dynamic.