What’s New
Applications for U.S. unemployment benefits decreased by 22,000 to 220,000 for the week ending Dec. 14, the Labor Department reported Thursday. This decline follows a notable increase in claims the previous week. The number was lower than analysts’ predictions of 229,000. Continuing claims, which track the total number of Americans still collecting jobless benefits, also dropped by 5,000 to 1.87 million for the week ending Dec. 7. This figure was also below analysts’ expectations.
The four-week average of claims, which helps smooth out weekly volatility, rose by 1,250 to 225,500. Weekly jobless claims serve as a key indicator of layoffs in the U.S.
Why It Matters
Despite recent fluctuations in unemployment claims, the U.S. job market remains broadly healthy. The Federal Reserve’s aggressive interest rate hikes since 2022, aimed at controlling inflation, have not significantly dampened employment conditions. While the job market has shown some signs of softening recently, it has proved more resilient than many experts had anticipated, considering the higher borrowing costs over the past few years.
The Federal Reserve’s actions have been focused on curbing inflation, which surged during the post-pandemic recovery. Although inflation has receded, reaching the central bank’s target of two percent has proved challenging. The Fed made its third consecutive rate cut on Wednesday, signaling a shift in its approach to managing the economy.
What to Know
Earlier this month, government data revealed that U.S. job openings increased to 7.7 million in October, rebounding from a three-and-a-half-year low of 7.4 million in September. This suggests businesses are still actively seeking workers, despite a slowdown in hiring.
In November, U.S. employers added a strong 227,000 jobs, significantly improving from the weak job growth of just 36,000 in October. The latter was affected by temporary disruptions, including strikes and hurricanes. The government also revised its job growth estimates for September and October, adding 56,000 jobs to the previous tally.
What People Are Saying
Federal Reserve Chairman Jerome Powell: “The economy is strong overall and has made significant progress toward our goals over the past two years.”
Nancy Vanden Houten, Lead U.S. Economist at Oxford Economics: “Initial jobless claims were much lower than expected in the week ended Dec. 14, as seasonal factors continue to batter the weekly claims data.”
What Happens Next
Analysts will continue to closely track unemployment claims and job growth data in the coming weeks. Any further shifts in these indicators will influence the Federal Reserve’s policy decisions, particularly regarding its future rate cuts. As the economy moves into 2025, the outlook for the job market will remain a critical factor in shaping economic policy.
This article includes reporting from The Associated Press
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