US initial jobless claims last week slightly decreased to 215k, with layoff rate remaining at a historical low.

The U.S. labor market continues to show strong resilience, but its internal structure is shifting. Companies are still reluctant to lay off workers, yet they have significantly slowed hiring—"slow hiring, no firing" has become the most distinctive feature of this economic cycle.

The latest data shows that for the week ending July 4 (including the U.S. Independence Day holiday), the number of Americans filing for unemployment benefits for the first time fell by 2,000 to 215k, below the market expectation of 217k, and remained near historical lows.

However, the number of continuing claims, which reflects the re-employment situation of the unemployed, rose to 1.81 million, the highest since March.

By state, California and Missouri saw the largest increases in initial claims, while New Jersey and Connecticut posted the largest declines.

"Slow hiring, no firing" becomes a hallmark of the U.S. labor market

The persistently low level of initial jobless claims, together with recent nonfarm payroll data, paints a picture of "shrinking layoffs and slowing hiring" in the U.S. labor market.

After years of labor shortages, companies generally tend to retain existing employees, which has limited the scale of layoffs. At the same time, hiring demand has clearly cooled. The June nonfarm report showed slowing job growth, a decline in the labor force participation rate, and some workers leaving the market, which also helped suppress the number of unemployment benefit claims.

Overall, the U.S. job market has entered a phase of "slow hiring, no firing": the risk of layoffs remains low, but the momentum of job growth is weakening. For the market, the persistently below-forecast initial claims data continues to support expectations of a "soft landing"—companies are not conducting mass layoffs, household income and consumption bases are solid, and the risk of a short-term recession is limited.

However, the combination of cooling hiring and a rebound in continuing claims also indicates that the labor market is gradually softening. In the coming months, indicators such as nonfarm payroll additions, continuing claims, and the labor force participation rate will be key variables for judging the direction of the job market and the Fed's policy path.

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