Applications for U.S. unemployment benefits declined last week, signaling sustained resilience in the labor market despite ongoing economic uncertainties. The Labor Department reported Thursday that initial jobless claims fell by 12,000 to 215,000 for the week ending June 20, below the 225,000 projections anticipated by analysts surveyed by FactSet.

Weekly unemployment filings are closely watched as an indicator of layoffs and overall labor market conditions. The recent figures suggest that layoffs remain low, even as concerns have mounted over the potential economic impact of geopolitical tensions in the Middle East, particularly the conflict involving Iran.

Following a downturn in 2025, when job growth slowed significantly with gains falling below 200,000, hiring activity has rebounded. Employers added 172,000 jobs in May, and average monthly job gains have increased to 188,000 over the past three months, marking the strongest hiring streak since early 2024. By comparison, the U.S. economy added roughly 1.5 million jobs throughout 2024. The unemployment rate remains near historic lows at 4.3%.

The report also underscored inflationary pressures affecting the economy. The Federal Reserve’s preferred measure of inflation, the personal consumption expenditures (PCE) price index, rose to a three-year high in May. This increase was largely driven by elevated gas prices, which surged following the disruption in oil shipments through the Strait of Hormuz near Iran’s southern border, a critical chokepoint through which about 20% of the world’s oil supply normally transits daily.

While questions persist about the broader economic impact of the Iran conflict and other challenges, the current data show a labor market that continues to absorb shocks without triggering significant layoffs, reflecting ongoing demand for workers across sectors.