Last week, the number of Americans filing for unemployment benefits slipped 13,000 to 224,000, keeping the figure comfortably within a historically healthy range.
Unemployment Claims Decline
The Labor Department reported on Thursday that new jobless claims for the week ending Dec. 13 fell from 237,000 to 224,000. This decline of 13,000 exceeded analysts’ forecast of 200,000 new applications for that week. The change is seen as a proxy for layoffs and a near-real-time indicator of the health of the job market.
November Job Gains and October Job Losses
Earlier in the month, the government announced that the United States added 64,000 jobs in November, surpassing the 40,000 economists had expected. In contrast, October saw a loss of 105,000 jobs, largely due to a 162,000 drop in federal workers. Many of those federal employees resigned on Sept. 30, the end of fiscal year 2025, under pressure from billionaire Elon Musk’s purge of U.S. government payrolls.
Labor Department Revisions
The Labor Department also revised payroll figures for August and September, knocking 33,000 jobs off those months’ totals. These revisions underscore the ongoing adjustments that shape the monthly employment picture.
Hiring Momentum and Economic Uncertainty
Hiring has slowed, with uncertainty over President Donald Trump’s tariffs and the lingering effects of the high interest rates the Federal Reserve engineered in 2022 and 2023 to curb pandemic-induced inflation. Since March, job creation has averaged 35,000 a month, compared with 71,000 in the year ended in March.
Federal Reserve Rate Cut
Last week, the Federal Reserve trimmed its benchmark lending rate by a quarter-point, marking the third straight cut. The move was aimed at easing borrowing costs amid concerns that the job market may be weaker than it appears.
Fed Chair Jerome Powell’s Comments
Fed Chair Jerome Powell explained that the committee reduced borrowing costs because “the job market is even weaker than it appears.” He added that recent job figures could be revised lower by as much as 60,000, which would mean employers have actually been shedding an average of about 25,000 jobs a month since the spring.
Corporate Job Cuts
Companies that have recently announced job cuts include UPS, General Motors, Amazon and Verizon. Those workforce reductions can take months to show up in the government’s data, so the impact may lag the announcements.
Four-Week Average of Claims
The Labor Department’s report also revealed that the four-week average of claims rose by 500 to 217,500. This average smooths out some of the week-to-week volatility and provides a broader view of unemployment trends.
Total Weekly Filings
The total number of Americans filing for jobless benefits for the week ending Dec. 6 rose by 67,000 to 1.9 million, according to the government. This figure reflects the cumulative demand for unemployment assistance over the past month.
Key Takeaways
- Unemployment claims fell 13,000 to 224,000, surpassing forecasts.
- November added 64,000 jobs, while October lost 105,000 jobs amid federal workforce reductions.
- The Federal Reserve’s third straight rate cut reflects concerns about a weaker job market.
The data suggest that while the job market remains robust in many respects, underlying shifts-such as federal layoffs, corporate job cuts, and monetary policy changes-continue to influence the employment landscape. The coming weeks will reveal whether these factors lead to a sustained change in unemployment trends.
