The weekly reading lands one day before the December jobs report, with analysts expecting the economy added 55,000 non-farm positions — a pace that would rank among the softest months for job creation since the pandemic recovery began.
WASHINGTON — Initial filings for unemployment benefits rose by 8,000 to 208,000 for the week ending Jan. 3, the Labor Department reported Thursday, arriving in line with analyst expectations as the U.S. labor market continued to show slowing momentum even as outright layoffs remained historically low.
The figure matched forecasts from analysts surveyed by the data firm FactSet. The four-week moving average of claims — which smooths week-to-week volatility — fell by 7,250 to 211,750.
Weekly claims serve as a near-real-time proxy for layoffs. The reading arrives one day before the government’s December jobs report, with analysts expecting the economy added 55,000 non-farm positions — a pace that, if confirmed, would mark one of the softest months for job creation since the pandemic recovery.
The unemployment rate stood at 4.6% as of the most recent government release, the highest level since 2021. The economy added a net 64,000 jobs in November, the Labor Department said, but that followed a loss of 105,000 positions in October, a drop the government linked in part to federal workforce reductions under the Trump administration.
Hiring Has Slowed Sharply Since Spring
Since March, monthly job creation has averaged 35,000 positions, down from an average of 71,000 in the preceding 12 months, according to the Labor Department. Economists point to two main drags: uncertainty generated by President Donald Trump’s broad import tariffs, and the lingering effects of the elevated interest rates the Federal Reserve maintained from 2022 through 2023 to combat pandemic-era inflation.
Separate Labor Department data released Wednesday showed businesses and government agencies posted 7.1 million open jobs at the end of November, down from 7.4 million in October. Layoffs also fell, a dynamic economists call “low hire, low fire” — companies retaining existing workers while remaining reluctant to add staff.
Companies that have recently announced job reductions include UPS, General Motors, Amazon, and Verizon, the Associated Press reported.
Fed Signals Deepening Concern
In an attempt to support the labor market, the Federal Reserve cut its benchmark lending rate by a quarter-point last month, its third consecutive reduction.
Federal Reserve Chair Jerome Powell said members of the rate-setting committee have grown increasingly concerned that the job market may be weaker than official figures show. Powell said recent payroll tallies could be revised downward by as much as 60,000, which would mean employers have on net been shedding roughly 25,000 jobs a month since the spring.
Continuing Claims Rise
The total number of Americans receiving ongoing unemployment benefits jumped by 56,000 to 1.91 million for the week ending Dec. 27, the Labor Department said. That measure tracks workers who remain on benefits after an initial filing and can signal difficulty finding new work after a layoff.
The December jobs report, due Friday, will offer a fuller picture of where the labor market ended 2025. Analysts surveyed by FactSet expected the report to show 55,000 non-farm jobs added.