Fewer Americans applied for unemployment benefits last week as U.S. layoffs remain low despite growing concern about a weakening job market.
U.S. filings for jobless aid for the week ending Jan. 10 fell by 9,000 to 198,000, down from 207,000 the previous week, the Labor Department reported Thursday. The figure was significantly less than the 215,000 that analysts polled by the data firm FactSet were expecting.
Applications for unemployment benefits are viewed as a proxy for layoffs and are close to a real-time indicator of the health of the job market.
Last week, the government reported that hiring remained sluggish in December, capping a year of weak employment gains that have frustrated job seekers even though layoffs and unemployment remained low.
Employers added just 50,000 jobs last month, nearly unchanged from a downwardly revised figure of 56,000 in November, the Labor Department said Friday. The unemployment rate slipped to 4.4%, its first decline since June, from 4.5% in November, a figure also revised lower.
Also last week, the Labor Department reported that businesses posted far fewer jobs in November than the previous month, a sign that employers aren’t yet ramping up hiring even as growth has picked up.
Businesses and government agencies posted 7.1 million open jobs at the end of November, down from 7.4 million in October. Layoffs also dropped as companies seem to be retaining workers even as they are reluctant to add staff, a trend economists refer to as “low hire, low fire.”
Recent government data has revealed a labor market in which hiring has clearly lost momentum, hobbled by uncertainty raised by President Donald Trump’s tariffs and the lingering effects of the high interest rates the Fed engineered in 2022 and 2023 to rein in a spike of pandemic-induced inflation.
In an attempt to stabilize a softening labor market, the Federal Reserve last month trimmed its benchmark lending rate by a quarter-point, its third straight cut.
Fed Chair Jerome Powell said members of the committee are increasingly concerned that the job market is even weaker than it appears. Powell suggested that recent job figures could be revised lower by as much as 60,000, which would mean employers have actually been shedding an average of about 25,000 jobs a month since the spring, when the Trump administration rolled out its sweeping import taxes.
Companies that have recently announced job cuts include UPS, General Motors, Amazon and Verizon.
Thursday’s report from the Labor Department also said that the four-week average of jobless claims, which evens out some of the week-to-week volatility, fell by 6,500 to 205,000.
The total number of Americans filing for jobless benefits for the previous week ending Jan. 3 declined by 19,000 to 1.88 million, the government said.
Ott writes for the Associated Press.
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