The number of Americans filing for unemployment benefits fell to an 11-month low last week, highlighting a stable labor market despite slower hiring and prolonged unemployment for some. Initial claims dropped by 10,000 to a seasonally adjusted 201,000 for the week ending Jan. 4, the lowest since February 2024, according to the Labor Department. The four-week moving average declined to 213,000, reflecting low layoff rates.
Economists see this as a sign of labor market stability, with job openings increasing in November, maintaining 1.13 vacancies per unemployed person. However, sluggish hiring persists, with December’s private payrolls rising by 122,000, below forecasts of 140,000. Continuing claims, a hiring proxy, rose by 33,000 to 1.867 million, partly due to seasonal adjustments.
The Federal Reserve is monitoring labor trends as it weighs further rate cuts. Fed Governor Christopher Waller noted that easing would depend on inflation progress without weakening the labor market. The Fed reduced rates to 4.25%-4.50% last month but projected a slower pace of cuts this year.
Economists expect Friday’s December jobs report to show nonfarm payroll growth of 160,000, down from November’s 227,000, with unemployment steady at 4.2%. While the labor market remains resilient, ongoing hiring slowdowns pose risks to economic momentum.
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