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US jobless claims unexpectedly fell for the second week, reaching 214,000, defying economists’ forecasts. However, continued claims, a measure of hiring, rose to 1.923 million during the survey period for December’s unemployment rate. This rise suggests a stagnant labor market, described as “no hire, no fire,” impacted by factors like tariffs and immigration policies. Despite a strong GDP growth in Q3, economists say the labor market has stalled. Consumer perception of the job market has also deteriorated. The Federal Reserve, awaiting labor market clarity, previously cut interest rates. Experts suggest that continued claims signal slow hiring but not worsening conditions.
News summary provided by Gemini AI.
WASHINGTON, Dec 24 (Reuters) – The number of Americans filing new applications for jobless benefits unexpectedly fell last week, consistent with a low level of layoffs, but the unemployment rate likely remained high in December amid sluggish hiring.
Initial claims for state unemployment benefits dropped for a second straight week, declining by 10,000 to a seasonally adjusted 214,000 for the week ended December 20, the Labor Department said on Wednesday.
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Economists polled by Reuters had forecast 224,000 claims for the latest week. The Labor Department published the report a day early because of the Christmas Day holiday. Part of the surprise decline in applications could reflect challenges adjusting the data for seasonal fluctuations around the year-end holiday season.
“Unless companies actually fire workers, the economy will continue to move forward at a moderate pace,” said Christopher Rupkey, chief economist at FWDBONDS.
The labor market remains locked in what economists and policymakers describe as a “no hire, no fire” mode.
The data had little effect on U.S. financial markets during a holiday-shortened session.
The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 38,000 to a seasonally adjusted 1.923 million during the week ended December 13, the claims report showed.
The so-called continued claims covered the period during which the government surveyed households to calculate December’s unemployment rate. Continued claims fell marginally between the November and December survey weeks.
“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 U.S. economist at Oxford Economics.
Reporting by Lucia Mutikani;
Editing by Dan Burns and Lisa Shumaker
Our Standards: The Thomson Reuters Trust Principles.
