The U.S. Labor Market Is Stabilizing

The number of Americans filing new applications for unemployment benefits decreased less than expected last week, but the decline was consistent with economists' view that the labor market was stabilizing after hitting a soft patch last year.

Economists said the Trump administration's trade and immigration policies were constraining the labor market, mostly through tepid hiring, though they were optimistic employment growth would pick up this year, partly because of tax cuts.

"The picture of the labor market gleaned from the claims data is not one of deteriorating conditions," said Nancy Vanden Houten, Oxford Economics' lead U.S. economist. "The labor market has stabilized and [it] will improve over 2026."

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