US weekly jobless claims increase marginally

• Continued unemployment claims increased 56,000 to 1.914 million, suggesting unemployed workers face longer jobless periods as hiring plans dropped 34% to their lowest level since 2010
• U.S.-based employers announced 1.206 million layoffs in 2025 (up 58%), with technology companies and federal government cuts accounting for most reductions due to AI implementation and cost-cutting measures
• Job openings fell to 0.91 per unemployed person in November, the lowest ratio since March 2021, while December nonfarm payrolls are forecast to add only 60,000 jobs with unemployment potentially easing to 4.5%

Summary: US Weekly Jobless Claims Edge Higher

Key Data Points:

• Initial unemployment claims rose 8,000 to 208,000 (seasonally adjusted) for the week ended December 27, slightly below the forecasted 210,000
• Continuing claims increased 56,000 to 1.914 million during the week ended December 20
• Annual layoff announcements jumped 58% to 1.206 million in 2025, a five-year high
• Hiring plans dropped 34% to 507,647 in 2025, the lowest since 2010

Market Context:

The labor market remains in "paralysis mode"—characterized by low layoffs but minimal hiring. Employers are hesitant to expand headcount due to tariff-related uncertainty and the rapid adoption of artificial intelligence. While historical layoff rates remain low, mass job cuts have been concentrated in federal government and technology sectors.

Sectoral Impact:

The technology industry has been particularly affected, with AI implementation and previous over-hiring triggering significant workforce reductions. According to Challenger, Gray & Christmas, tech companies are pivoting to AI faster than other industries, creating a "wave of job loss."

Labor Market Indicators:

Job openings fell to a 14-month low in November, with only 0.91 openings per unemployed person—the lowest since March 2021. Extended joblessness is increasing due to weak hiring activity.

Forward Outlook:

December's employment report (releasing Friday) is expected to show 60,000 nonfarm payroll additions. The unemployment rate is projected to decline to 4.5% from November's four-year high of 4.6%, though November data was distorted by a 43-day federal government shutdown. The softening labor market may support the case for additional Federal Reserve interest rate cuts.