New data from the United States indicates a resilient jobs market, with the number of Americans applying for unemployment benefits dropping below a key threshold last week.
Claims Fall as Layoffs Remain Low
The US Labor Department reported that applications for jobless claims fell by 16,000 to a total of 199,000 for the week ending 27 December. This figure came in below analyst expectations and represents a significant drop from the previous week's revised total of 215,000. The data, released a day early due to the New Year's Day holiday, suggests that employers are largely holding onto their staff despite signs of a cooling economy.
Analysing the Underlying Trends
While the weekly figure provides a snapshot, economists often look to the four-week moving average to smooth out volatility. This measure rose slightly by 1,750 to 218,750. However, the broader picture remains positive for workers. The total number of Americans continuing to claim unemployment benefits for the week ending 20 December fell by 47,000 to 1.87 million.
Applications for unemployment aid are considered a reliable, near real-time proxy for layoffs. The consistently low level of claims indicates that the labour market retains significant strength, even as other economic indicators show signs of weakening.
What This Means for the Economic Outlook
The latest jobless claims report presents a complex picture. On one hand, the headline figure falling below 200,000 is a strong signal of labour market tightness, which typically supports consumer spending. On the other hand, the slight rise in the four-week average warrants attention from policymakers.
For now, the data suggests that widespread job losses are not yet materialising in the US economy. This resilience in the employment sector will be a key factor monitored by the Federal Reserve and global markets as they assess the path of interest rates and economic growth in 2026.
