The number of Americans seeking unemployment benefits saw a significant drop last week after experiencing a considerable rise the prior week.
According to the latest report from the Labor Department, jobless claim applications decreased by 22,000, bringing the total down to 220,000 for the week ending December 14. This figure was lower than the anticipated 229,000 that analysts had predicted.

In addition, continuing claims, which reflect the total number of individuals receiving jobless benefits, also saw a decline of 5,000, tallying at 1.87 million for the week of December 7. This statistic was again below analysts’ expectations.

The four-week average of weekly claims, which helps mitigate the typical week-to-week fluctuations, rose by 1,250 to reach 225,500.

Applications for weekly jobless benefits are an important indicator of layoffs in the U.S. job market. Despite some recent signs of softening in the job market, it remains fundamentally strong and has outperformed many predictions made by experts, especially given the sustained increase in interest rates over the years.

To combat the high inflation rates that emerged as the U.S. economy recovered from the relatively brief pandemic recession, the Federal Reserve implemented a series of interest rate hikes in 2022 and 2023. The Fed made another cut to its benchmark rate on Wednesday – its third consecutive reduction – as inflation continues to show signs of easing, although getting down to the central bank’s target of 2% has proven challenging.

Moreover, a surprising announcement from the Fed triggered a significant selloff on Wall Street Wednesday; the central bank indicated it plans to implement only two rate cuts in 2025, a reduction from the previously anticipated four cuts.

Earlier this month, the government revealed that U.S. job openings rose to 7.7 million in October, bouncing back from a 3.5-year low of 7.4 million recorded in September. This uptick suggests that businesses are still in need of workers, even though the pace of hiring has slowed down.

In November, U.S. employers added a robust 227,000 jobs, significantly recovering from an anemic addition of just 36,000 jobs in October, a month during which strikes and hurricanes had a substantial negative impact on payroll numbers. Additionally, the government adjusted its previous job growth estimates for September and October upwards by a total of 56,000.