Americans filed fewer new claims for jobless benefits last week in a surprise dip, signaling layoffs remain low — but don’t pop the champagne yet.
The unemployment rate likely remained stubbornly high in December as employers slammed the brakes on hiring, though monthly figures won’t be available until next month.
Initial claims for state unemployment benefits dropped for a second straight week, falling by 10,000 to a seasonally adjusted 214,000 for the week ended Dec. 20, the Labor Department said Wednesday.
The figures were better than expected, according to Reuters, which forecast 224,000 claims for the latest week.
Still the job market is stuck in what economists call a grim holding pattern of “no hiring, no firing.”
While the broader economy has been chugging along — with the country’s gross domestic product growing at its fastest clip in two years in the third quarter — employers have been holding off on expanding their workforces.
“Unless companies actually fire workers, the economy will continue to move forward at a moderate pace,” Christopher Rupkey, chief economist at Fwdbonds, told Reuters.
The Labor Department released the latest numbers a day earlier than usual because of Thursday’s Christmas holiday.
Officials say the year-end holiday rush can throw off seasonal adjustments, muddying the true picture of the job market.
Experts point to President Trump’s import tariffs and immigration crackdown as squeezing both the supply of workers and demand for new hires.
Meanwhile, the ranks of Americans collecting unemployment checks after their first week of aid — a key sign of hiring activity — jumped by 38,000 to a seasonally adjusted 1.9 million in the week ending Dec. 13, according to the latest report.
The so-called continued claims — which cover the window the government surveyed households to calculate December’s unemployment rate — fell marginally between the November and December survey weeks.
Those stubbornly high numbers track with a gloomy Conference Board survey released Tuesday revealing that Americans feel worse about the job market than at any point since early 2021.
The unemployment rate climbed to a four-year high of 4.6% in November, though part of that rise was chalked up to technical factors tied to the 43-day government shutdown.
“Continued claims remain at a level consistent with a slow pace of hiring but aren’t sending a signal that hiring conditions have gotten worse,” said Nancy Vanden Houten, lead US economist at Oxford Economics.
Thousands of federal employees filed for unemployment benefits during the government shutdown, which ended last month. For the week ended Dec. 13, the latest period for which data were available, there were 805 new unemployment claims by ex-federal workers, according to the Labor Department.
