Key information
- New claims for unemployment benefits hit their lowest level since April, with a total of 211,000.
- The four-week average of claims fell by 3,500 to 223,250.
- The proportion of the workforce relying on unemployment benefits decreased from 1.3 percent to 1.2 percent.
Unemployment insurance claims reached their lowest level since April, reflecting a robust job market despite a general trend toward slowing employment conditions. For the week ending December 28, new claims totaled 211,000, a decrease of 9,000 from the previous week. Economic analysts expected an increase to around 225,000, with potential volatility due to year-end hiring patterns.
The four-week average of claims fell by 3,500 to 223,250, while the proportion of the workforce relying on unemployment benefits fell from 1.3 percent to 1.2 percent. The Federal Reserve was criticized for its initial decision to cut interest rates by half a point in September. The move followed revised projections for inflation and employment levels, suggesting a potentially stronger economy than expected.
Impact of monetary policy
The Fed’s December update reflected this by raising the inflation outlook for 2025 from a projected annual increase of 2.1 percent to 2.5 percent based on the inflation index. price of personal consumption expenditure. She also lowered her unemployment rate forecast from 4.4 percent to 4.3 percent. Despite recent positive indicators, hiring and employment conditions have generally cooled over the past year due to the Fed’s monetary tightening policies.
-Changes in the job market
The average duration of unemployment reached a two-year high in November, rising from 20 weeks the previous year to around 24 weeks. The unemployment rate rose to 4.2 percent from its low point of 3.4 percent in 2023. Additionally, the ratio of the number of available jobs to the number of job seekers increased from 2 to 1 to 1.1 during this period.
If you want access to all articles, subscribe here!
