The number of Americans applying for unemployment benefits rose sharply to 236,000 for the week ending Dec. 6, an increase of 44,000 from the previous week’s 192,000.
The new claims figure exceeded analysts’ forecast of 213,000 and marks a significant jump, though claims remain within a historically healthy range.
Driving the news: The prior week’s data was likely distorted by the Thanksgiving holiday, accounting for some of the volatility in the numbers.
- Jobless benefits applications act as a proxy for layoffs and are closely watched as near real-time indicators of labor market health.
- Although layoffs remain relatively mild, the labor market shows signs of underlying weakness, prompting the Federal Reserve to cut its benchmark lending rate by a quarter-point for the third straight time.
- Fed Chair Jerome Powell suggested the labor market may be weaker than government data indicates, noting the possibility that recent job gains could be revised down significantly, implying that employers may have been shedding jobs overall since spring.
- Powell highlighted “significant downside risks” in the labor market, cautioning that job security remains a major concern for many Americans.
The big picture: While overall layoffs have not surged, hiring has slowed considerably, leading to a so-called “low-hire, low-fire” environment with both low job creation and low job loss.
- Private payroll firm ADP estimated U.S. job losses of 32,000 in November, reinforcing recent government data showing a clear decline in job growth since tariffs on trading partners were enacted in April.
- Although September saw a solid gain of 119,000 jobs, both June and August experienced net job losses, and the unemployment rate has risen to 4.4%, a four-year high.
- The latest comprehensive government jobs report has been delayed due to a government shutdown, postponing updated labor market readings.
Go deeper: Layoffs announced by major companies like UPS, General Motors, Amazon, and Verizon may appear in future data since these cuts typically take some time to be fully implemented.
- The number of Americans receiving jobless benefits for the previous week dropped by 99,000 to 1.84 million, the lowest since mid-April, though analysts attribute part of this drop to seasonal factors and the expiration of benefits after 26 weeks.
- The four-week average of unemployment claims, which smooths out volatile week-to-week changes, increased slightly by 2,000 to 216,750.
