US initial jobless claims fell by 13,000 to a seasonally adjusted 224,000 for the week ending December 13.
The development comes as a reversal to the previous week’s sharp spike and points to continued restraint in corporate layoffs.
The reading is slightly better than consensus expectations of 225,000 and provided reassurance that labor market conditions remain resilient despite broader concerns about economic deceleration heading into 2026.
US jobless claims fall, layoffs remain low
The 13,000 decline pulls claims back toward recent baseline levels after they jumped to 236,000 the previous week, marking the largest weekly increase since March 2020.
Thursday’s easing suggests the spike was largely the result of seasonal distortions around the December holiday period, rather than a true weakening in hiring behavior.
The four-week moving average edged up slightly to 217,500 but remains historically low and well below the 300,000 level that labor economists typically associate with meaningful labor-market stress.
Initial jobless claims track the number of people filing for unemployment benefits for the first time each week and are widely viewed as a near-real-time indicator of layoffs.
A decline in claims points to fewer employers cutting staff, reinforcing the view that despite recent headwinds, job losses remain limited.
Continuing claims, which measure workers already receiving benefits, increased by 67,000 to 1.897 million for the week ending December 6.
That rise suggests some unemployed workers are taking longer to find new jobs, likely reflecting softer hiring conditions rather than widespread layoffs.
The Labor Department also reported that November nonfarm payrolls grew by just 64,000 jobs, underscoring that while layoffs remain contained, job creation has slowed sharply.
Implications for markets and policy
The jobless claims reading carries immediate significance for Federal Reserve policy expectations.
Softer labor data generally supports the case for continued rate cuts in 2026, as persistent low layoffs paired with slowing hiring could bolster arguments that the Fed has room to ease without risking inflation reacceleration.
Markets absorbed the claims report quietly, with the US Dollar Index declining slightly to 98.30, a subtle signal that traders view the data as supportive of a dovish Fed stance through early 2026.
US consumer prices rose less than expected in November, reinforcing investor optimism that the Federal Reserve may accelerate interest rate cuts.
Headline CPI increased 2.7% year on year, below forecasts of 3.1%, while core inflation eased to 2.6%.
The data comes amid political pressure and signs of labour market softening, intensifying debate within the Fed over how quickly policy should shift toward easing.
The key metric markets will focus on is next month’s employment report, due in early January.
That reading will reveal whether December delivered genuinely resilient job creation or whether the slowdown apparent in November persists.
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