The number of Americans filing new unemployment claims fell to a one-month low, reflecting a steady but cooling labor market likely to keep the Federal Reserve from further interest rate cuts in the near term.
Initial claims dropped by 1,000 to 219,000 for the week ending Dec. 21, below economists’ forecast of 224,000. Despite fluctuations tied to seasonal holiday hiring, claims remain consistent with the yearly average of 220,000, indicating muted layoffs.
However, continued claims, representing those on benefits after the first week, rose by 46,000 to 1.91 million for the week ending Dec. 14—the highest since November 2021. Economists had expected 1.88 million. The average unemployment duration in November reached 23.7 weeks, the longest since April 2022, signaling challenges for job seekers.
Hiring has slowed, with December’s job growth likely below November’s 227,000, as per Jefferies economist Thomas Simons, who forecasts 170,000 new jobs for December. Yet, layoffs remain low, highlighting a tight labor supply.
The Federal Reserve, which cut interest rates three times since September, signaled a pause in further reductions. While the labor market is cooling in an orderly manner, inflation remains above the 2% target, prompting a cautious approach.
The job market remains a key focus for policymakers as they balance economic growth and inflationary pressures.
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