U.S. Weekly Jobless Claims Rise Slightly

• Continuing unemployment claims increased 56,000 to 1.914 million, indicating more people are experiencing prolonged joblessness as hiring plans dropped 34% to 507,647 in 2025, the lowest since 2010
• Job openings fell to 0.91 per unemployed person in November, the lowest since March 2021, reflecting weak labor demand despite employers avoiding mass layoffs
• Technology and federal government sectors accounted for the bulk of planned job cuts in 2025, driven by AI implementation and cost-cutting measures rather than broad economic weakness

Summary: U.S. Weekly Jobless Claims Rise Slightly

Key Data Points:

• Initial unemployment claims rose 8,000 to 208,000 (seasonally adjusted) for the week ending December 27, slightly below the economist forecast of 210,000
• Continuing claims increased 56,000 to 1.914 million for the week ending December 20
• Announced layoffs in 2025 surged 58% to 1.206 million, a five-year high
• Hiring plans dropped 34% to 507,647 in 2025, the lowest since 2010
• Job openings ratio fell to 0.91 per unemployed person in November, the lowest since March 2021

Market Implications:

The labor market remains in a state of "paralysis," characterized by low layoffs but sluggish hiring. Employers are hesitant to expand headcount due to tariff-related uncertainty and AI adoption, yet are not conducting mass firings. This low-hire, low-fire environment is prolonging unemployment duration for jobless workers.

Sectors Affected:

Technology and federal government sectors drove the bulk of 2025 layoffs. Tech companies are pivoting rapidly toward AI implementation while dealing with previous over-hiring, according to Challenger, Gray & Christmas.

Forward Outlook:

December's employment report (released Friday) is expected to show 60,000 nonfarm payroll additions, with unemployment likely dipping to 4.5% from November's 4.6% (though November data was distorted by a 43-day federal government shutdown). The weak labor demand may strengthen the case for additional Federal Reserve interest rate cuts. Claims data showed typical year-end volatility but maintained historically low layoff levels overall.