The number of Americans filing for unemployment benefits fell again last week. Claims remain at a historically healthy level, according to The Associated Press, which first reported the data.
New applications for jobless benefits dropped by 10,000 to 214,000 for the week ending Dec. 20. The Labor Department released the figures on Wednesday. That was down from the previous week’s revised total of 224,000. It was also well below the 232,000 claims economists expected, based on FactSet forecasts.
The weekly report came out a day earlier than usual. The schedule was moved up because of the Christmas holiday. Initial jobless claims are closely watched by economists. They are seen as a near real-time indicator of layoffs and labor market health.
While claims remain low, other data suggest the job market is losing strength. The government recently reported the U.S. added 64,000 jobs in November. That followed a revised loss of 105,000 jobs in October.
The October decline was driven by a sharp drop in federal employment. About 162,000 federal workers left their jobs at the end of fiscal year 2025 on Sept. 30. Many departures followed pressure tied to payroll cuts during the Trump administration.
The unemployment rate also moved higher last month. It rose to 4.6 percent. That is the highest level recorded since 2021.
Earlier payroll data were also revised lower. The Labor Department removed a combined 33,000 jobs from August and September totals.
Hiring has clearly slowed in recent months. Since March, job creation has averaged just 35,000 positions per month. That compares with an average of 71,000 jobs per month in the year that ended in March. Economists point to uncertainty surrounding President Donald Trump’s tariff policies. They also cite lingering effects from high interest rates set by the Fed in 2022 and 2023 to fight inflation.
Earlier this month, the Federal Reserve lowered its benchmark interest rate by a quarter point. It marked the third straight rate cut. Jerome Powell said policymakers are worried the labor market may be weaker than current data suggest. He warned recent job numbers could be revised lower by as much as 60,000. That would mean employers have been shedding about 25,000 jobs per month since the spring.
Several large companies have already announced job cuts. Those include UPS, General Motors, Amazon and Verizon. Such reductions often take months to appear in government data.
The Labor Department also reported a slight improvement in longer-term trends. The four-week average of unemployment claims fell by 750 to 216,750. That figure smooths out weekly volatility.
At the same time, continuing claims moved higher. The number of Americans receiving jobless benefits rose by 38,000 to 1.92 million for the week ending Dec. 13. That suggests some laid-off workers are taking longer to find new jobs, even as layoffs remain relatively low overall.