Jobless Claims Show Subtle Decline Amid Labor Market Uncertainty
WASHINGTON (AP) — Applications for unemployment benefits in the United States experienced a modest decline last week, remaining within historically robust confines even as signs of labor market frailty emerge.
For the week concluding on December 20, jobless claims decreased by 10,000, settling at 214,000 compared to the previous week’s figure of 224,000, according to the Labor Department’s report released on Wednesday. This count is notably lower than the 232,000 anticipated by analysts surveyed by FactSet.
The report was disseminated a day earlier due to the upcoming Christmas holiday.
Unemployment aid applications serve as a barometer for layoffs and function as a proximate indicator of job market vitality.
Last week, the government disclosed that the nation added a commendable 64,000 jobs in November; however, this was overshadowed by a loss of 105,000 positions in October, attributed to the departure of federal employees after budgetary reductions enacted during the Trump administration.
The unemployment rate nudged up to 4.6% last month, marking the highest level since 2021.
The job losses in October were primarily driven by a substantial reduction of 162,000 federal workers, many of whom departed at the conclusion of the fiscal year 2025 on September 30, influenced by billionaire Elon Musk’s extensive austerity measures targeting the U.S. government workforce.
Moreover, Labor Department revisions subtracted 33,000 jobs from the payroll figures for August and September.
Hiring momentum has notably waned, impeded by uncertainties linked to President Donald Trump’s tariffs and the prolonged repercussions of the high-interest rates instituted by the Federal Reserve in 2022 and 2023 to control pandemic-related inflation.
Since March, the average job creation figures have plummeted to 35,000 positions per month, a stark contrast to the average of 71,000 for the year ending in March.
Earlier this month, the Federal Reserve executed a quarter-point reduction in its benchmark lending rate, marking the third consecutive cut.
Fed Chair Jerome Powell indicated that this decision stemmed from apprehensions that the job market may be weaker than it appears.
Powell suggested that recent job data could be subject to downward revisions by as much as 60,000, implying that net job losses may average around 25,000 monthly since spring.
Recent announcements of workforce reductions have emanated from notable companies such as UPS, General Motors, Amazon, and Verizon; however, these cuts can take considerable time to manifest within government data.
The Labor Department’s report further revealed that the four-week moving average of claims—accounting for weekly fluctuations—declined by 750, totaling 216,750.
Additionally, the number of Americans seeking jobless benefits for the preceding week ending December 13 rose by 38,000, reaching 1.92 million, as reported by the government.
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