U.S. initial jobless claims dropped by 16,000 to a seasonally adjusted 199,000 for the week ending December 27, 2025, falling below the expected 220,000 and indicating a continued, tight labor market with low layoffs. The four-week moving average rose slightly to 218,750, while continuing claims dropped to 1.87 million.
Key details regarding the Dec. 31 report:
Weekly Change: Claims fell from a revised 215,000 the previous week to 199,000, representing one of the lowest readings since early 2024.
Market Context: Despite high interest rates, the "no hire, no fire" trend persists, and this surprise drop in new claims may affect expectations for Federal Reserve interest rate cuts in January.
Volatility: Data for this period included Christmas and other holiday-related adjustments, noted for potential volatility.
This report, released a day early due to the New Year's holiday, suggests that while hiring is sluggish, employers are not rushing to lay off workers.
