Jobless Claims Fall for Second Straight Week, But Millions Still Struggle to Find Work
The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, dropping by 10,000 to a seasonally adjusted 214,000 for the week ending December 20. This marks the second consecutive week of decline and is below economists’ forecast of 224,000 claims, according to the Labor Department. Analysts suggest part of the surprise decrease may reflect seasonal adjustments around the holiday period.
Continued Claims Show Rise in Unemployment Benefits
While new jobless claims fell, the number of people receiving unemployment benefits after an initial week of aid; known as continued claims, rose by 38,000 to 1.923 million for the week ending December 13. Continued claims are an important measure of ongoing unemployment and serve as a proxy for hiring trends.
A “No Hire, No Fire” Job Market
Economists describe the current U.S. labor market as being in a “no hire, no fire” mode, where layoffs are low, but hiring is also slow.
Despite resilient economic growth, with GDP increasing at its fastest pace in two years during the third quarter, labor market activity has largely stalled, limiting opportunities for job seekers.
Impact of Federal Policies on Labor Market
President Donald Trump’s import tariffs and immigration policies have influenced both labor demand and supply.
Additionally, workforce reductions by federal agencies, including departures of 162,000 federal employees in October, have affected overall employment figures.
Unemployment Rate Remains Elevated
The unemployment rate increased to 4.6% in November, the highest level since 2021. Part of this rise is attributed to technical adjustments following the 43-day government shutdown, which disrupted data collection for October. Economists caution that while new claims are low, the overall labor market remains under pressure.
Job Creation Slows Significantly
Since March, monthly job creation has fallen to an average of 35,000, down from 71,000 in the previous year. Employers like UPS, General Motors, Amazon, and Verizon have announced workforce reductions, although such changes often take months to be fully reflected in official data.
Federal Reserve Adjustments and Economic Implications
The Federal Reserve recently cut its benchmark lending rate by 25 basis points to a range of 3.50%–3.75% in response to weaker-than-expected labor data. Fed Chair Jerome Powell noted that some recent job figures could be revised downward by up to 60,000, indicating that employers may have been shedding jobs at a slow pace since spring.
Labor Market Sentiment Deteriorates
Consumer confidence in the labor market has also weakened. A survey by the Conference Board showed that perceptions of employment conditions fell to levels last seen in early 2021. This sentiment aligns with elevated continued claims, suggesting slower hiring but no dramatic deterioration in job opportunities.
Historical Context of Jobless Claims
Despite the current slowdown, new claims for unemployment benefits remain at historically healthy levels. The four-week average of claims, which smooths out weekly volatility, decreased slightly to 216,750, reinforcing the idea that the U.S. labor market is experiencing a gradual cooling rather than a sharp decline.
A Labor Market in Transition
Overall, the latest data reflect a labor market that is resilient yet sluggish. Low layoffs have kept new jobless claims down, but ongoing high levels of continued claims and slowing hiring trends indicate that the economy is treading carefully, with both businesses and workers navigating a period of uncertainty.
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Ray Dalio Joins Michael Dell in Backing Trump Accounts for America’s Kids
President Trump’s signature “One Big Beautiful Bill” created tax-advantaged “Trump Accounts” to give American children an investment-powered jumpstart in life. President Trump’s new child investment program is quickly attracting some of the most powerful names in American finance. Hedge fund legend Ray Dalio and tech billionaire Michael Dell are now publicly backing Trump Accounts, pouring billions of private dollars into a system designed to give U.S. children an early stake in the stock market. What began as a $1,000 government seed investment for newborns is rapidly evolving into a public-private wealth-building engine, backed by Wall Street, Silicon Valley, and major philanthropies. Supporters say the surge of elite funding is a clear signal that Trump Accounts could become one of the most significant long-term savings initiatives ever created for American families.
Ray Dalio Joins Michael Dell in Backing Trump Accounts for America’s Kids
New Social Security CBO Proposal Would Cut Benefits for Top 50% of Retirees
The Congressional Budget Office (CBO) has released a controversial new budget option that aims to shore up the federal government’s finances by targeting the retirement checks of high-income Americans. With the federal deficit hitting a staggering $1.8 trillion in Fiscal Year 2025 and the Social Security insolvency clock ticking down to 2033, this proposal offers a stark look at one potential “fix”: changing the math to pay the wealthy less.
New Social Security CBO Proposal Would Cut Benefits for Top 50% of Retirees
Social Security Crisis: New Plan Could Tax High Earners to Prevent 21% Benefit Cut
The United States is facing a fiscal double-whammy: a ballooning federal budget deficit and a Social Security trust fund racing toward depletion. With the Congressional Budget Office (CBO) releasing new numbers on potential fixes, one option is gaining significant attention: uncapping the Social Security payroll tax.
Social Security Crisis: New Plan Could Tax High Earners to Prevent 21% Benefit Cut
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John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
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