U.S. applications for unemployment benefits fell to their lowest level in nearly a year last week, pointing to a still healthy labor market with historically low layoffs.
Lowest Applications in Nearly a Year
The Labor Department reported that applications for jobless benefits decreased to 201,000 for the week ending January 4, down from the previous week’s 211,000. This week’s figure is the lowest since February of last year.
Improving Job Market
The four-week average of claims, which evens out the week-to-week ups and downs, fell by 10,250 to 213,000. The overall numbers receiving unemployment benefits for the week of December 28 rose to 1.87 million, an increase of 33,000 from the previous week.
The U.S. job market has cooled from the red-hot stretch of 2021-2023 when the economy was rebounding from COVID-19 lockdowns. Employers added an average of 180,000 jobs a month in 2024, down from previous years, but still solid.
Resilience in the Face of Challenges
The unemployment rate is at a modest 4.2%, though slightly up from a half century low of 3.4% reached in 2023. The Federal Reserve has made efforts to combat inflation by raising interest rates but is now being cautious about future rate cuts.
Looking Ahead
When the Labor Department releases hiring numbers for December, they’re expected to show that employers added 160,000 jobs last month. Job openings rose unexpectedly in November, indicating companies are still looking for workers even as the labor market has loosened.
The weekly jobless claims numbers are a proxy for layoffs and have remained below pre-pandemic levels. Despite challenges, the job market remains resilient, showing signs of strength in the face of high interest rates and inflation concerns.
U.S., unemployment benefits, labor market, job market, Federal Reserve, inflation, interest rates
