US Jobless Claims Fall To 199,000 During Christmas Week

Applications for US unemployment benefits fell last week to one of the lowest levels this year, accentuating volatility in the data during the holiday season.  

Initial claims decreased by 16,000 to 199,000 in the week ended Dec. 27, according to Labor Department data released Wednesday. That was lower than all estimates in a Bloomberg survey of economists and one of just a handful of readings below 200,000 since early 2024.

The figures have been volatile recently, as is typical at this time of year. The latest period included Christmas, as well as the newly declared federal holidays of Dec. 24 and 26. 

Applications for unemployment benefits jumped at the beginning of the month after falling to a three-year low around Thanksgiving in the week prior. The four-week moving average of initial applications, a metric that helps smooth out volatility, ticked up to 218,750.

Continuing claims, a proxy for the number of people receiving benefits, decreased to 1.87 million in the previous week. That was also one of the lowest readings in recent months.

The US has seen sluggish hiring through much of this year, which has eroded Americans’ views of their employment prospects. Meantime, the unemployment rate has climbed to a four-year high, even as layoffs remain relatively limited. 

A report from the Conference Board last week showed more Americans think jobs are hard to get, and the share saying jobs are plentiful is decreasing. Economists expect the unemployment rate to remain elevated throughout 2026.

Before adjusting for seasonal factors, initial claims increased last week. New Jersey, Pennsylvania and Michigan saw more applications, while Texas and California registered fewer.

What Bloomberg Economics Says...

“Initial jobless claims declined below 200k during the Christmas week, as an imperfect seasonal-adjustment process suppressed the headline figure. Looking ahead, we think weak hiring will keep the Fed accommodative in 2026, with some policymakers flagging labor-market fragility and the risk of sharper job losses in a low-hiring environment.”