MATT OTT Business Writer.

U.S. jobless claim applications fell to their lowest level in two months last week as layoffs remain low despite mounting evidence of a softening labor market. The number of Americans filing for unemployment benefits for the week ending Sept. 20 fell by 14,000 to 218,000, the Labor Department reported Thursday. Analysts surveyed by the data firm FactSet had forecast 235,000 new applications. The four-week average of claims, which softens some of the weekly volatility, declined by 2,750 to 237,500. The total number of Americans collecting unemployment benefits for the previous week of Sept. 13 inched down by 2,000 to 1.93 million.

In another grim sign for the U.S. labor market, jobless claim applications jumped to their highest level in almost four years last week, virtually assuring the Federal Reserve will cut its benchmark interest rate next week. Filings for unemployment benefits for the week ending Sept. 6 rose by 27,000 to 263,000, the Labor Department reported Thursday. That’s the most since October of 2021. Most analysts were already forecasting an interest rate cut next week after Fed Chair Jerome Powell recently signaled as much. However, another report Thursday showing that consumer inflation remains elevated could complicate the Fed’s task of managing inflation while supporting a healthy labor market.

The number of Americans filing for jobless benefits rose modestly last week, a sign that employers still retaining workers despite economic uncertainty related to U.S. trade policy. The Labor Department reported Thursday that jobless claims for the week ending Aug. 2 rose by 7,000 to 226,000, slightly more than the 219,000 new applications analysts forecast. The report is the first government labor market data release since Friday’s grim July jobs report sent financial markets spiraling downward, spurring President Donald Trump to fire the head of the agency that tallies the monthly jobs numbers. Applications for jobless benefits serve as a proxy for layoffs.

Filings for U.S. unemployment benefits rose to their highest level in eight months last week but remain historically low despite growing uncertainty about how tariffs could impact the broader economy. New applications for jobless benefits rose by 8,000 to 247,000 for the week ending May 31, the Labor Department said Thursday. That’s the most since early October. Analysts had forecast 237,000 new applications. Weekly applications for jobless benefits are considered representative of U.S. layoffs. The four-week average of jobless claims, which evens out some of the week-to-week gyrations during more volatile stretches, rose by 4,500 to 235,000, the most since late October.