Jobless claims fall to lowest level of the year, signaling a more stable labor market

By Greg Robb

Claims fall 23,000 to 206,000, well below expectations

The sizable drop in claims mirrors the stronger-than-expected jobs report in January, with the unemployment rate dipping to 4.3%.

Initial jobless claims retreated to the lowest level of the year, a sign that the labor market is finding its feet after weakening last year.

Claims for state unemployment benefits fell by 23,000 to a total of 206,000 in the week ending Feb. 14, the Labor Department said Thursday. That's the lowest level since the week ending Dec. 27.

The drop in claims was much greater than expected. Economists polled by the Wall Street Journal had estimated new claims would fall to 223,000, down from an initial estimate last week of 227,000.

Claims had risen to as high as 232,000 in late January.

Key details: The number of new claims based on actual filings - that is, before seasonal adjustments - fell 42,509 in the latest week, to 207,694. There were 223,538 initial claims in the comparable week last year.

The number of people already collecting unemployment benefits in the week of Feb. 7 rose by 17,000 to 1.87 million, the government said.

Big picture: Some economists said claims data is still being distorted by the heavy snowstorm in late January.

The sizable drop in claims mirrors the stronger-than-expected jobs report in January, with the unemployment rate dipping to 4.3%. But other labor-market data has been weaker, and economists remain split on the outlook for the year.

Federal Reserve staff forecast projected stronger economic activity this year that will lead to a gradual decline in unemployment rate, according to minutes of the central bank's January policy meeting released Wednesday. Fed officials were less worried about the labor market than they had been while inflation concerns remained strong.

Market reaction: Stocks SPX were set to open lower on Thursday. The yield on the 10-year Treasury note BX:TMUBMUSD10Y rose to 4.107%.

-Greg Robb

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02-19-26 0912ET