While headlines keep cataloguing AI-driven layoffs, the fastest-moving indicator in the United States labour market moved the other way. The Labor Department’s weekly claims report, released Thursday 24 September, showed initial claims for unemployment benefits slipped 1,000 to a seasonally adjusted 197,000 for the week ended 19 September — below the 201,000 economists polled by Reuters had forecast, and near levels last seen in 1969.
What the numbers say
The four-week moving average, which smooths out weekly noise, fell 1,750 to 202,250. The count of people collecting unemployment checks sat near three-year lows during the week the government surveyed households for September’s jobless rate, and continuing claims — a proxy for how easy it is to find a new job — were little changed at 1.719 million, near levels last seen in 2023. The report also suggested the unemployment rate held steady at 4.1 percent this month.
The most striking quote in the Reuters coverage came from FWDBONDS chief economist Christopher Rupkey: “in mid-September the economy seems to be firing on all cylinders in part due to the extraordinary capex expenditures on AI.” In his telling — and he is one voice among many — the enormous AI build-out is not just a tech-industry story; it is demand that supports employment across construction, power, hardware and the professional services orbiting them.
The caveats, stated plainly
The report itself flags reasons not to over-read the exact level. Economists attribute part of the glide lower to difficulty seasonally adjusting the data around moving holidays like Labour Day, plus a “residual seasonality” effect that tends to push claims down as the year winds down. A single week near a 57-year low is a trend data point, not proof the labour market has re-accelerated.
The structure underneath the headline number is also less rosy than the total. Companies are holding the workers they have — low layoffs — but are not rushing to hire, with economists pointing to uncertainty from the Middle East conflict, tariffs, and a labour supply shrunk by an immigration crackdown and retirements. An S&P Global survey released Wednesday noted companies in September were “also reporting increasing problems finding suitable staff.” And Reuters notes long spells of unemployment remain common among people who have lost jobs — the claims data says little about how hard re-entry is for those already outside. Citigroup economist Veronica Clark cautioned that a lower unemployment rate driven by a smaller labour force “would not necessarily imply a retightening labor market.”
So the honest summary is: almost nobody is being fired, almost nobody new is being hired, and AI investment is — at least in the view of economists tracking the data — one of the forces keeping it that way.
Why this matters against the AI-jobs panic
This data point lands in the middle of a year of duelling narratives. We have covered the layoff side extensively — Challenger-tracked AI-attributed cuts ran through mid-year, and Big Tech restructurings continued into spring. But the broader statistical picture keeps refusing to collapse: the New York Fed’s own survey work found AI is reshaping tasks more than eliminating jobs, and federal projections through 2035 still show net growth in AI-adjacent sectors — utilities, healthcare and data science — even as administrative roles shrink.
The pattern the claims data adds is a specific one: AI investment, at this stage, behaves like a jobs stabiliser. Capex on data centres, chips and power does not primarily employ software engineers — it employs electricians, technicians, project managers and regional service firms. Meanwhile the feared mass layoffs stay rare because firms that have invested heavily in AI would rather hoard trained staff than cut and re-hire later. That “low-fire” half of the equation is the direct cousin of New Zealand’s own “low-fire, low-hire” market — except in the US, it is sitting on top of an investment boom.
The New Zealand comparison
New Zealand’s labour market is cycling in the opposite direction. The Westpac-McDermott Miller Employment Confidence Index, published 22 September, rose 3.2 points to 86.3 in the September quarter — a bounce off June’s lows, but still near the lowest levels since the survey began in 2004. A net 60 percent of respondents said it was hard to find a job, unchanged from the previous quarter, consistent with unemployment sitting at an 11-year high of 5.6 percent. Westpac senior economist Michael Gordon described the environment as “low-fire, low-hire.”
The gap with the US picture is instructive rather than comforting. The US labour market’s stability rests partly on capital spending at a scale New Zealand simply does not have an equivalent of — there is no NZ data-centre boom of comparable size to cushion demand. Where the two markets align is the behavioural half: employers in both countries are protecting existing staff while delaying new roles, which squeezes the same group everywhere — recent graduates, career switchers and anyone who lost a job and is trying to get back in.
For Kiwi workers the practical takeaway from the US data is about timing. Low-layoff environments eventually loosen into hiring when uncertainty clears, and firms that hoard skilled staff through a slow patch typically expand fastest when conditions turn. That pattern has historically rewarded the people who used a slow hiring market to add AI-adjacent skills while competition was quiet.
FAQ
How low are US weekly jobless claims right now? Initial claims for the week ended 19 September 2026 were 197,000, seasonally adjusted — near levels last seen in 1969, according to the Labor Department’s 24 September release.
Does this prove AI is good for jobs? No single data point proves that. One economist quoted by Reuters credits AI capex with keeping the economy strong, and layoffs are historically rare — but seasonal-adjustment caveats apply, and hiring is slow.
What is the US unemployment rate? Around 4.1 percent as of September 2026, per the claims report and Chicago Fed forecasting. New Zealand’s rate is 5.6 percent, an 11-year high.
What does “low-fire, low-hire” mean? Employers are neither cutting staff nor hiring aggressively — a pattern Westpac uses to describe New Zealand’s labour market, and one that also fits the low-layoffs, slow-hiring US picture.
— CJ Murden, editor of Singularity.Kiwi. Former digital technologies teacher, author of AI-focused books. Writing with a New Zealand focus.
