New U.S. unemployment applications fall to 1-month low

In this photo illustration, a person files an application for unemployment benefits on April 16, 2020, in Arlington, Virginia. The government reported Thursday that another 5.2 million US workers filed for unemployment benefits, taking the four-week total to 22 million, a staggering figure in a downturn that economists say presents the country with its most severe outlook since the Great Depression of the 1930s. (Photo by Olivier DOULIERY / AFP) (Photo by OLIVIER DOULIERY/AFP via Getty Images)
In this photo illustration, a person files an application for unemployment benefits on April 16, 2020, in Arlington, Virginia. (Photo by OLIVIER DOULIERY/AFP via Getty Images)

OAN Staff Katherine Mosack
9:22 AM – Wednesday, December 31, 2025

The number of Americans filing new applications for unemployment benefits dropped unexpectedly last week to one of the lowest levels this year.

Claims for state unemployment fell by 16,000 to a seasonally adjusted 199,000 for the week that ended on December 27th, the U.S. Department of Labor (DOL) reported on Wednesday. The report was published a day early due to the New Year’s Day holiday on Thursday. The number last week ended lower than the forecast of 220,000 from economists polled by Reuters.

This is not the first time this year that new unemployment applications have fallen. So far, the number of people remaining on unemployment after their initial application has held steady, a sign that layoffs may be dropping, but hiring is slow, indicating that Americans should become comfortable in their current positions. A report from the Conference Board released last week showed that more Americans believe jobs are hard to obtain.

However, the number of Americans receiving extended aid also fell by 47,000 to a seasonally adjusted 1.866 million during the week that ended on December 20th, according to the claims report. This was also one of the lowest readings in months.

 

The unemployment rate increased to 4.6% in November, partly due to the 43-day government shutdown, which ended on the 12th. The record-long shutdown also prevented data collection for October’s unemployment rate.

The Labor Department will publish the employment figures for December on January 9th.

Meanwhile, the Federal Reserve cut its benchmark interest rate by 25 basis points to a range of 3.50% to 3.75% for the third time this year. However, it remains unclear if borrowing costs will fall again in the new year as policymakers await further reporting on the labor market and inflation after the lapse in government funding.

 

Inflation was recently reported to be below the forecast rate, as well, with the Labor Department finding a 2.7% consumer price index (CPI) rise, rather than Wall Street’s 3.1%.

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