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Filings for unemployment benefits are viewed as representative of U.S. layoffs and are close to a real-time indicator of the health of the job market.

On Wednesday, the government reported that U.S. employers added a 130,000 jobs in January and the unemployment rate fell to a still-low 4.3% from 4.4%. However, government revisions cut 2024-2025 U.S. payrolls by hundreds of thousands. That reduced the number of jobs created last year to just 181,000, a third of the previously reported 584,000 and the weakest since the pandemic year of 2020.

While weekly layoffs have remained in a historically low range mostly between 200,000 and 250,000 for the past few years, a number of high-profile companies have announced job cuts recently, including , , and the in recent weeks.

Mounting layoff announcements in the past year, combined with the government’s own sluggish labor market reports, have left Americans about the economy.

The Labor Department also recently reported that to the lowest level in more than five years, another sign that the American labor market remains sluggish, even though the economy is .

Data over the past year has broadly revealed a labor market in which hiring has clearly slowed, hobbled by uncertainty raised by President Donald Trump’s tariffs and the lingering effects of the high interest rates the Fed engineered in 2022 and 2023 to tamp down a spike of pandemic-induced inflation.

Economists are conflicted about whether the stronger-than-expected January job gains are a one-off or possibly the first sign of a recovering labor market, which could lead the Fed to further delay more cuts to its key interest rate.

Some Fed officials have specifically argued that last year’s weak hiring shows that borrowing costs are weighing on growth and discouraging companies from expanding. A sustained pickup in hiring could undercut that theory.

Fed officials signaled that they expect to reduce their key rate once more this year, while Wall Street investors expect two reductions, according to futures pricing.

Thursday’s unemployment benefits report from the Labor Department also showed that the four-week moving average of jobless claims, which balances out some of the weekly volatility, rose by 7,000 to 219,500.

The total number of Americans filing for jobless benefits for the previous week ending Jan. 31 increased by 21,000 to 1.86 million, the government said.