A career expo in Harlem is attended by job seekers.
Since President Donald Trump succeeded Joe Biden about a year ago, the U.S. economy has seen many changes, but one thing has remained constant: the low number of layoffs. Simply put, businesses aren’t firing many employees.
In the seven days ending December 20, the number of people applying for unemployment benefits, or initial jobless claims, decreased by 10,000 to a seasonally adjusted 214,000, the government reported on Wednesday. Because of the Christmas break, the report was released one day early.
To what extent is that low? In a typical economy, there are typically between 250,000 and 300,000 new claims every week.
Furthermore, despite significant economic volatility in the United States, jobless claims do not appear to be increasing. In fact, there were fewer new jobless claims at the end of this year than there were at the end of 2024.
Although the low number of layoffs is fantastic, most businesses are not creating new positions. This trend is known as a “low-hire, low-fire” labor market by economists.
However, as long as the majority of people are employed and feel safe in their positions, they will probably purchase enough goods and services from companies to maintain a healthy rate of economic growth.
Important information: The number of continuing claims, or those already receiving unemployment benefits, increased by 38,000 to 1.92 million.
In recent years, continuing claims have increased to a post-pandemic peak, but in recent months, they seem to have steadied.
Overall: It seems that the low-fire, low-hire labor market will persist for some time. There is little indication that companies are getting ready to add a large number of new employment.
However, hiring is expected to progressively improve and employment should be a little simpler to find if the economy accelerates in 2026 as most experts think.
Considering the future: Claims of unemployment “are consistent with a slow pace of hiring but aren’t sending a signal that hiring conditions have gotten worse,” according to Oxford Economics’ head U.S. economist Nancy Vanden Houten.
Market response: On Wednesday, the S&P 500 SPX and Dow Jones Industrial Average DJIA were expected to open little lower.
