Weekly unemployment claims hit their lowest level since April during the final full week of 2024.
In the latest sign that layoffs remain low, data from the Department of Labor released Thursday morning showed 211,000 initial jobless claims were filed in the week ending Dec. 27, down from 220,000 the week prior and below the 221,000 economists had expected.
Meanwhile, 1.84 million continuing claims were filed, down from the 1.89 million seen the week prior. Largely, economists believe the continued low number of weekly jobless claims combined with relatively steady continuing claims reflects a “low hire, low fire” type labor market.
In a note to clients on Thursday, Jefferies US economist Thomas Simons said that holidays could’ve impacted the recent claims numbers. But zooming out, Thursday’s data falls in line with the recent trend that the “labor market deterioration remains gradual,” Simons wrote.
With the unemployment rate moving higher throughout most of 2024 and monthly job gains slowing, the labor market is ending the year inarguably having cooled from where it started. The hiring rate fell from 3.7% at the end of 2023 to 3.3% at the end of 2024, further showing that while Americans aren’t losing their jobs, its becoming increasingly harder to find one, too.
Federal Reserve Chair Jerome Powell referenced this dynamic in his final press conference of the year on Dec. 18. The central bank is closely monitoring the state of the job market and US economy overall as it tries to bring inflation down to 2%.
“What’s going on in the labor market is that the hiring rate is low,” Powell said. “If you have a job, you’re doing very well, and layoffs are very low. So people are not losing their jobs in large numbers, unusually large numbers.”
Powell described the labor market overall as “good,” noting that the “downside risks” that emerged in the summer of 2024 as the unemployment rate spiked “appear to have diminished.” He added that the Fed’s current goal with the labor market is to keep it in its current state, with no further weaknesses emerging.
“The labor market is now looser than pre-pandemic, and it’s clearly still cooling further, so far in, in a gradual and orderly way,” Powell said. “We don’t think we need further cooling in the labor market to get inflation down to 2 percent.”
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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