US Weekly Jobless Claims Hit Eight-Month Low

• Initial applications for US unemployment capped 2024 at an eight-month low, reflecting the relatively muted levels of job cuts in a labour market that has remained surprisingly resilient.

• New claims fell by 9,000 to 211,000 in the week ended December 28, 2024, lower than all but one estimate in a Bloomberg survey. Meanwhile continuing applications, a proxy for the number of people receiving benefits, also fell to a three-month low of 1.84 million in the week ended December 21, 2024, according to Labor Department data released Thursday, January 2, 2025.

• The current levels for initial claims are subdued, in line with their pre-pandemic levels, and consistent with a job market where companies are generally holding onto their workers.

• The report added to a recent raft of upbeat economic data, including consumer spending, in reinforcing the Federal Reserve's projections for fewer interest rate cuts this year. Labour market resilience is keeping the economic expansion on track.

• The US labour market is ending the year in what Federal Reserve Chair Jerome Powell described last month as a “solid shape.” A spike in the unemployment rate over the summer had raised alarms, prompting policymakers to cut interest rates by a half-percentage point in September to help support employment. 

• More recent data have pointed to a labour market that is moderating but remains broadly solid. It is cooling, but not in a way that would raise concerns, Powell said at a press briefing in mid-December following Fed policymakers’ decision to lower rates for the third time in three months.

(Source: Reuters & BNN Bloomberg)