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The number of Americans filing new applications for unemployment benefits rose modestly last week, pointing to low levels of layoffs but continued weakness in hiring as employers remain cautious amid tariff-related uncertainty and the growing adoption of artificial intelligence.
Initial claims for state unemployment benefits increased by 8,000 to a seasonally adjusted 208,000 for the week ended December 27, according to data released by the US Labor Department on Thursday. Economists polled by Reuters had expected claims to rise to 210,000.
The data showed that job cuts remain low by historical standards, although claims have been volatile in recent weeks due to seasonal adjustment challenges around the year-end holiday period.
Employers have been reluctant to expand headcount, citing policy uncertainty and rapid technological shifts, but have also avoided large-scale layoffs—leaving the labour market in what analysts describe as a state of paralysis.
Hiring plans fell 34 per cent to 507,647 in 2025, the lowest level since 2010, raising concerns that unemployed workers may face longer spells without work. The number of people continuing to receive unemployment benefits—a proxy for hiring — rose by 56,000 to 1.914 million in the week ended December 20.
Separate government data released on Wednesday showed job openings fell to a 14-month low in November, with just 0.91 vacancies for every unemployed person, the lowest ratio since March 2021.
Quick Reads
View AllEconomists expect non-farm payrolls to have risen by around 60,000 in December, after an increase of 64,000 in November. The unemployment rate is forecast to have edged down to 4.5 per cent, following a rise to 4.6 per cent in November, which was partially distorted by a prolonged federal government shutdown.
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