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By Suzanne Blake
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Unemployment claims slowed down last week ahead of the holidays, according to data released by the Labor Department.
Despite this decrease, Americans are largely feeling pessimistic about the job market and the larger economy overall.
Why It Matters
Americans’ perceptions of the economy have been critical in recent months, with the majority of adults viewing it more negatively than positively.
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Roughly 26 percent said economic conditions were excellent or good in a Pew Research survey in October, while 74 percent said they were fair or poor.
Unemployment rates can be a key factor taken into account in terms of larger economic performance.
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What To Know
Unemployment benefits applications were at 214,000 last week, indicating a drop of 10,000 from the previous week's total of 224,000.
Wall Street had previously predicted unemployment claims to reach 231,500 for that week, according to FactSet.
However, continuing jobless claims climbed to 1.92 million from 1.88 million. This encompasses the number of people already receiving unemployment benefits and was slightly higher than estimates of 1.86 million.
During the month of November, unemployment climbed to 4.6 percent, sparking concerns amongst economists.
President Donald Trump fired the former Commissioner of Labor Statistics in August after the July jobs numbers came 73,000 jobs short of what was anticipated.
The U.S. economy only added 64,000 jobs in November after losing 105,000 in October, according to the Bureau of Labor Statistics.
“The slight drop in unemployment claims is certainly welcome news, but it is more than likely due to trends with claims we’ve seen in the holiday periods of past years,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek. “The holiday season can trigger delays in both the filing and processing of paperwork. We also traditionally see a small boost in seasonal hiring that mitigates the number of new claims. Any decline is good news, but we would have to see several weeks more of drops to signal a more optimistic outlook.”
What People Are Saying
President Donald Trump wrote on Truth Social: “100% OF OUR NEW JOBS ARE IN THE PRIVATE SECTOR! I could reduce Unemployment to 2% overnight by just hiring people into the Federal Government, even though those Jobs are not necessary. I wish the Fake News would report the 4.5% correctly.”
Heather Long, chief economist at Navy Federal Credit Union, posted to X: “The US economy is in a hiring recession. Almost no jobs have been added since April. Wage gains are slowing. 710,000 more people are unemployed now versus November 2024.”
Bill Adams, chief economist for Comerica Bank (Dallas, Texas), previously said in a statement shared with Newsweek: “The latest jobs data pressure the Fed to cut rates again when they next meet in January. Hiring momentum has weakened in recent months, and the Fed will want to arrest this deterioration and help labor demand regain traction.”
What Happens Next
Since unemployment routinely moves lower during this time of year, the drop largely reflects a normal situation, said Kevin Thompson, the CEO of 9i Capital Group.
“Americans should expect continued higher unemployment or underemployment moving forward, as companies push more money into the AI technology race and slow staffing,” Thompson said.
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