US unemployment claims fall again last week, remain at historically healthy level

WASHINGTON — The number of Americans applying for unemployment benefits fell last week and remain at historically healthy levels despite some signs that the labor market is weakening.

U.S. applications for jobless claims for the week ending Dec. 20 fell by 10,000 to 214,000 from the previous week's 224,000, the Labor Department reported Wednesday. That's below the 232,000 new applications forecast of analysts surveyed by the data firm FactSet.

The weekly report was released a day early due to the Christmas holiday.

Applications for unemployment aid 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 the U.S. gained a decent 64,000 jobs in November but lost 105,000 in October as federal workers departed after cutbacks by the Trump administration.

The unemployment rate rose to 4.6% last month, the highest since 2021.

The October job losses were caused by a 162,000 drop in federal workers, many of whom resigned at the end of fiscal year 2025 on Sept. 30 under pressure from billionaire Elon Musk's purge of U.S. government payrolls.

Hiring has clearly lost momentum, hobbled by uncertainty over President Donald Trump's tariffs and the lingering effects 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.

Earlier this month, the Federal Reserve trimmed its benchmark lending rate by a quarter-point, its third straight cut.

Fed Chair Jerome Powell said the committee reduced borrowing costs out of concern that the job market is even weaker than it appears. Powell said 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.

Companies that have recently announced job cuts include UPS, General Motors, Amazon and Verizon, but those workforce reductions can take months to show up in the government's data.

The Labor Department's report Wednesday also showed that the four-week average of claims, which evens out some of the week-to-week volatility, fell by 750 to 216,750.