WASHINGTON — The number of Americans applying for unemployment benefits remained relatively stable last week, with initial jobless claims totaling 219,000 for the week ending December 21st. This figure, reported by the Labor Department on Thursday, is 1,000 lower than the previous week and slightly below analysts’ predictions of 223,000.
However, continuing claims—the total number of Americans receiving unemployment benefits—increased by 46,000 to 1.91 million for the week ending December 14th. This surpasses analysts’ forecasts and represents the highest level in three years, since November 13th, 2021, a time when the labor market was still recovering from the pandemic’s impact. The rise in continuing claims suggests that some benefit recipients are facing difficulties finding new employment, potentially indicating a weakening demand for workers despite the overall economic strength. The four-week average of weekly claims, which smooths out week-to-week fluctuations, also rose slightly, increasing by 1,000 to 226,500.
Recent data hints at a slight softening in the labor market, although it remains generally healthy and has performed better than many economists anticipated, given the sustained period of elevated interest rates. The Federal Reserve implemented a series of rate hikes throughout 2022 and into 2023 to combat persistently high inflation. Last week, the Fed reduced its benchmark interest rate for the third consecutive time, reflecting a broader decline in inflation, although rates remain above the central bank’s 2% target. Surprisingly, the Fed projected only two rate cuts in 2025, a significant downward revision from their previous forecast of four.
Despite the nuanced jobless claims data, other indicators suggest continued labor market strength. Job openings rebounded to 7.7 million in October, up from a 3 1/2-year low of 7.4 million in September, signaling ongoing demand for workers. November saw a robust addition of 227,000 jobs, recovering from a weaker October figure impacted by strikes and hurricanes. Government revisions also added 56,000 jobs to September and October’s totals. The next jobs report, covering December, is scheduled for release on January 10th.