Applications for U.S. unemployment benefits fell to their lowest level in 10 weeks, signaling continued resilience in the labor market despite slower hiring in June. The Labor Department reported Thursday that initial jobless claims declined by 8,000 to 208,000 for the week ending July 11, a figure below the 219,000 new applications forecast by analysts. Weekly filings for unemployment aid are closely watched as an indicator of layoffs and overall labor market health.

Earlier this month, the government’s June jobs report showed employers adding only 57,000 positions, less than half the number created the previous month. This slowdown in hiring suggests many companies remain cautious about expanding their workforce amid economic uncertainty. The unemployment rate edged down to 4.2% in June from 4.3% in May, though this drop is partly attributed to a decline in the labor force as some unemployed workers stopped looking for jobs and were no longer counted as unemployed.

The moderate pace of job growth in June follows stronger hiring gains over the prior three months, helping to ease concerns that geopolitical tensions in Iran would derail the U.S. labor market. Since the economy emerged from the pandemic recession, weekly jobless claims have mostly remained between 200,000 and 250,000, a historically low range. However, hiring started slowing about two years ago and softened further in 2025 amid factors including former President Donald Trump’s tariffs, federal workforce reductions, and the impact of elevated interest rates aimed at curbing inflation.

Several large companies have recently reduced headcounts, including Verizon, UPS, Amazon, Disney, Starbucks, and Walmart. In early July, Microsoft announced cuts of 4,800 jobs, approximately 2.1% of its global workforce, with significant layoffs concentrated in its Xbox video game division.

Thursday’s report also showed that the four-week moving average of initial claims, which smooths out weekly volatility, fell by 4,750 to 214,250. Additionally, continuing claims—the total number of Americans receiving unemployment benefits—dropped by 16,000 for the week ending July 4 to 1.81 million, maintaining a level consistent with a historically stable labor market.