US weekly jobless claims fall as labour market remains stable in December

The number of Americans filing new applications for unemployment benefits fell last week, reversing the prior week's surge and suggesting labor market conditions remained stable in December. 

Initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 224,000 for the week ended December 13, the Labor Department said on Thursday. Economists polled by Reuters had forecast 225,000 claims for the latest week. 

Claims have see-sawed in recent weeks, reflecting challenges adjusting the data around the Thanksgiving holiday. The labor market tone has not changed much, with employers reluctant to hire more workers, but not embarking on mass layoffs either. 

Economists say President Donald Trump's sweeping tariffs have caused an unexpected shock for businesses, who have responded by pulling back on increasing head count. 

A survey of 548 chief financial officers, spanning firms with one to more than 1,000 employees, conducted by the Federal Reserve banks of Richmond and Atlanta in conjunction with Duke University's Fuqua School of Business showed on Wednesday they continued to cite tariffs as a top concern. 

The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of December's employment report. Nonfarm payrolls increased by 64,000 jobs in November, the Bureau of Labor Statistics said on Tuesday. December's employment report will be released on schedule in January. 

Though the unemployment rate was at 4.6 per cent in November, the highest since September 2021, it was distorted by technical factors related to the 43-day government shutdown, which caused the BLS not to publish the jobless rate for October. The longest shutdown in history prevented the collection of data from households needed to calculate October's unemployment rate. 

Policymakers at the Federal Reserve last week cut the US central bank's benchmark overnight interest rate by another 25 basis points to the 3.50 per cent to 3.75 per cent range. But they signaled a pause to further rate cuts while seeking clearer signals about the direction of the job market and inflation. 

Tepid hiring is causing long bouts of unemployment for some who have lost their jobs. The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 67,000 to a seasonally adjusted 1.897 million during the week ending December 6, the claims report showed.