Unemployment claims rise, but job market stays strong with low layoffs and high job openings. (AP/Nam Y. Huh)
- Jobless claims rose by 14,000, but the job market remains broadly healthy with historically low layoffs.
- December job growth surged with 256,000 new jobs, and unemployment fell to 4.1%, signaling economic strength.
- Despite recent high-profile layoffs, U.S. job openings unexpectedly rose to 8.1 million in November.
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The number of Americans applying for unemployment benefits rose last week, but layoffs remain historically low and the job market broadly healthy.
Applications for jobless benefits rose by 14,000 for the week ending January 11, the Labor Department said Thursday, up from the previous week’s 203,000. The previous week’s figure was the lowest since February of last year.
The four-week average of claims, which softens some of the week-to-week volatility, dipped by 750 to 212,750.
The total number of Americans receiving unemployment benefits for the week of January 4 fell to by 18,000 to 1.86 million.
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Weekly Claims as Proxy for Layoffs
Weekly applications for jobless benefits are considered a proxy for layoffs.
Though some signs of labor market weakness surfaced in 2024, jobs are still plentiful and layoffs historically low.
Last week, the Labor Department reported that job growth in December surged and unemployment fell. Employers added 256,000 jobs last month and the unemployment rate ticked down to 4.1%.
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Economic Implications and Federal Reserve Outlook
The final jobs report of 2024 underscores that the economy and hiring were able to grow at a solid pace even with interest rates much higher than they were before the pandemic. As a result, the Federal Reserve could be much less likely to cut borrowing costs again in the coming months after issuing three cuts late in 2024.
Overall, the solid jobs figures suggest the economy is entering a post-COVID period of steady growth, higher interest rates, low unemployment, and slightly elevated inflation.
Also last week, the government reported that U.S. job openings rose unexpectedly in November, showing companies are still looking for workers even as the labor market has loosened. Openings rose to 8.1 million in November, the most since February and up from 7.8 million in October.
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Recent High-Profile Layoffs
Though layoffs remain healthy by historical standards, several high-profile companies have announced job cuts in the past few months.
Just this week, Facebook parent company Meta announced that it was laying off 5% of its staff and spirits giant Brown-Forman — the maker of Jack Daniel’s — said it’s reducing its global workforce by about 12%.
Late in 2024, GM, Boeing, Cargill and Stellantis all announced layoffs.
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