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U.S. Jobless Claims Fall to 198,000 as Holiday Volatility Clouds the Signal

Seasonal adjustments likely drove the surprise, pointing to low layoffs with sluggish hiring.

Overview

  • Initial claims declined by 9,000 to a seasonally adjusted 198,000 for the week ended Jan. 10, below the 215,000 forecast.
  • Continuing claims decreased by 19,000 to 1.884 million for the week ended Jan. 3, with the insured unemployment rate holding at 1.2%.
  • The Federal Reserve’s Beige Book reported employment was mostly unchanged in early January and noted broader use of temporary workers with hiring largely backfilling vacancies.
  • Nonfarm payrolls rose by 50,000 in December, bringing 2025 job gains to 584,000, the weakest annual increase in five years, as the unemployment rate ticked down to 4.4%.
  • Economists said President Donald Trump’s trade and immigration policies and firms’ heavy AI investment are weighing on staffing plans and curbing hiring.