The number of Americans filing new applications for jobless benefits suddenly went down last week, as reported yesterday, December 24, by Reuters.

The report said that this development is consistent with a low level of layoffs recently, but that the unemployment rate likely remained high in December due to a slow rate of hiring.

However, at the same time, initial claims for state unemployment benefits dropped for a second straight week, going down by 10,000 to a seasonally adjusted 214,000 for the week that ended on December 20, as reported by the Labor Department.

Reuters also polled economists on the matter, saying that they had forecast 224,000 claims for the latest week. However, the Labor Department’s report ended up coming out one day early because of the Christmas Day holiday.

The decline comes as a surprise, but the report says that the development might be reflecting challenges in adjusting the data for seasonal fluctuations around the holiday season at the end of the year.

The Labor Market Locked In “No Hire, No Fire” Mode

Christopher Rupkey, the chief economist at FWDBONDS, commenced on the matter, saying that unless companies actually fire workers, the economy should continue to move forward at a moderate pace.

Meanwhile, the labor market remains locked in a so-called “no hire, no fire” mode, as described by policymakers and economists.

While the economy remains resilient for the time being, with gross domestic product going up at its fastest pace in two years as of Q3 2025, the report highlighted that the labor market has almost stalled. Economists have noted that President Donald Trump’s import tariffs and immigration crackdown have had a significant impact on both labor demand and supply.

Ultimately, the data had little effect on the US financial markets in the holiday-shortened season.

However, one thing to note is that the number of people who received unemployment benefits after the initial week of aid, a proxy for hiring, went up 38,000 to a seasonally adjusted 1.923 million during the week ended December 13.

The continued claims covered the period in which the US government surveyed households to try and calculate the unemployment rate in December, noting that continued claims went down marginally between the November and December survey weeks.