U.S. applications for jobless claims for the week ending December 27, 2025, fell by 16,000 to 199,000, from the previous week’s 215,000, the Labor Department reported earlier this week. The Associated Press noted that unemployment benefit filings are often distorted during holiday-shortened weeks.
Claims have been “volatile in recent weeks amid challenges adjusting the data for seasonal fluctuations ahead of the holiday season,” as the labor market remains locked in what economists and policymakers describe as a "no hire, no fire" mode, wrote Reuters.
“Though the economy remains resilient, with gross domestic product increasing at its fastest pace in two years in the third quarter, the labor market has almost stalled. Labor demand and supply have been impacted by import tariffs and an immigration crackdown, economists say,” Reuters said.
Earlier in December, the government reported that the United States gained 64,000 jobs in November but lost 105,000 in October. These numbers helped to push the unemployment rate up to 4.6% last month, the highest since 2021.
“Recent government data has revealed a labor market in which hiring has clearly lost momentum, hobbled by uncertainty over President Donald Trump’s tariffs and the lingering effect of the high interest rates the Fed engineered in 2022 and 2023 to rein in an outburst of pandemic-induced inflation. Since March, job creation has fallen to an average 35,000 a month, compared to 71,000 in the year ended in March,” wrote AP.
Earlier this month, the Federal Reserve trimmed its benchmark lending rate by a quarter-point, its third straight cut.
The government in December also reported that U.S. retail sales were decelerating.