Slightly more Americans file for jobless benefits in last week of 2025, but layoffs remain low

US filings for jobless benefits rose in the last week of 2025 but remain historically low, despite signs that the labour market is weakening.

The number of Americans filing for jobless claims for the week ending January 3 rose by 8,000 to 2,08,000, up from 2,00,000 the previous week, the Labour Department reported Thursday. The figure was right in line with what analysts surveyed by the data firm FactSet were expecting.

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Applications for unemployment aid are viewed as a proxy for layoffs and are close to a real-time indicator of the health of the job market.

Last month, the government reported that the US gained a decent 64,000 jobs in November but lost 1,05,000 in October as federal workers departed after cutbacks by the Trump administration. That helped to push the unemployment rate up to 4.6%, the highest since 2021.

The government’s December jobs report will be released Friday, with analysts expecting that the US added 55,000 non-farm jobs.

On Wednesday, the Labour Department reported that businesses posted far fewer jobs in November than the previous month, a sign that employers aren’t yet ramping up hiring even as growth has picked up.

Businesses and government agencies posted 7.1 million open jobs at the end of November, down from 7.4 million in October. Layoffs also dropped as companies seem to be retaining workers even as they are reluctant to add staff, a trend economists refer to as “low hire, low fire.” Recent government data has revealed a labour market in which hiring has clearly lost momentum, hobbled by uncertainty raised by President Donald Trump’s tariffs and the lingering effects of the high interest rates the Fed engineered in 2022 and 2023 to rein in a spike of pandemic-induced inflation.

Since March, job creation has fallen to an average 35,000 a month, compared to 71,000 in the 12 months ended in March.

In an attempt to stabilise a softening labour market, the Federal Reserve last month trimmed its benchmark lending rate by a quarter-point, its third straight cut.

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Fed Chair Jerome Powell said members of the committee are increasingly concerned that the job market is even weaker than it appears. Powell suggested that recent job figures could be revised lower by as much as 60,000, which would mean employers have actually been shedding an average of about 25,000 jobs a month since the spring, when the Trump administration rolled out its sweeping import taxes.

Companies that have recently announced job cuts include UPS, General Motors, Amazon and Verizon.

The Labour Department reported Thursday that the four-week average of claims, which softens some of the week-to-week volatility, fell by 7,250 to 2,11,750.

The total number of Americans filing for jobless benefits for the previous week ending December 27 jumped by 56,000 to 1.91 million, the government said.