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Posted December 31, 2025 at 11:30 am
New filings hit a one-month low while unemployment and consumer confidence point to a “no hire, no fire” economy that could keep the Fed waiting to cut rates again.
Weekly US jobless claims fell to a one-month low, but the broader labor market still looks stuck in a “no hire, no fire” phase that could keep the Federal Reserve on pause.
Initial claims dropped by 16,000 to 199,000 in the week ended Dec. 27, beating forecasts – though late-December figures can be noisy because of seasonal adjustments. Continuing claims fell to 1.866 million (week ended Dec. 20) but remained higher than a year ago, suggesting it’s not getting dramatically easier to land a new job. Put together, it’s the current vibe: firms aren’t doing mass layoffs, yet they’re not hiring aggressively either. Consumers are noticing – the Conference Board’s labor-market perceptions slipped in December to their weakest level since early 2021. Q3 GDP still grew at its fastest pace in two years even as unemployment climbed to 4.6% in November, a level a Chicago Fed tracker suggests held in December.
For markets: One data point won’t force the Fed’s hand.
Lower claims support the “soft landing” story, but the Fed typically needs a run of evidence before it changes course. With unemployment around 4.6% and continuing claims still elevated, officials can say the job market is cooling without cracking, which reduces urgency to cut rates quickly. The next key test is the December jobs report on Jan. 9 – it could confirm the holding pattern or show a clearer turn.
The bigger picture: A slow-motion jobs market still hits everyday demand.
When people think jobs are harder to get, they usually pull back on discretionary spending, and the dip in labor sentiment points that way. Slower hiring can also cool wage growth, helping inflation, but it can sap momentum if households stay cautious. That’s how you can get solid GDP prints alongside a less confident Main Street – and fewer clean signals for the Fed.
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Originally Posted December 30, 2025 – Jobless Claims Fell, But The US Labor Market Still Looks Stuck
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