US applications for unemployment benefits hold steady, but continuing claims rise to 3-year high

WASHINGTON (AP) — The number of Americans applying for unemployment benefits held steady last week, though continuing claims rose to the highest level in three years.

Jobless claim applications ticked down by 1,000 to 219,000 for the week of Dec. 21, the Labor Department reported Thursday. That’s fewer than the 223,000 analysts forecast.

Continuing claims, the total number of Americans collecting jobless benefits, climbed by 46,000 to 1.91 million for the week of Dec. 14. That's more than analysts projected and the most since the week of Nov. 13, 2021 when the labor market was still recovering from the COVID-19 jobs wipeout in the spring of 2020.

The rising level of continuing claims suggests that some who are receiving benefits are finding it harder to land new jobs. That could mean that demand for workers is waning, even though the economy remains strong.

The four-week average of weekly claims, which quiets some of the week-to-week volatility, inched up by 1,000 to 226,500.

Weekly applications for jobless benefits are considered representative of U.S. layoffs.

The labor market has hinted at some softening recently but remains broadly healthy and has held up better than many economists predicted considering that interest rates have been elevated for years. The Federal Reserve instituted a series of rate increases in 2022 and into 2023 to try to tame the four-decade high inflation that emerged during the U.S. economy’s rebound from a brief but sharp pandemic recession.

The Fed last week cut its benchmark interest rate for the third straight time in response to broadly receding inflation, though it remains above the U.S. central bank’s target of 2%. The Fed caught markets off guard when it projected just two rate cuts in 2025, down from the previous forecast of four.

Earlier this month, the government reported that U.S. job openings rebounded to 7.7 million in October from a 3 1/2 year low of 7.4 million in September, a sign that businesses are still seeking workers even though hiring has cooled.

In November, U.S. employers added a strong 227,000 jobs, following a paltry 36,000 in October, when the effects of strikes and hurricanes had sharply diminished employer payrolls. The government also revised up its estimate of job growth in September and October by a combined 56,000.

The government’s December jobs report comes out on Jan. 10.