US jobless claims fell to three-year low over Thanksgiving

Applications for US unemployment benefits fell last week to the lowest in more than three years, indicating that employers are still largely holding onto workers despite a wave of recent layoff announcements.

Initial claims decreased by 27,000 to 191,000 in the week ended November 29, a period that included the Thanksgiving holiday. The median forecast in a Bloomberg survey of economists called for 220,000 applications. The weekly claims data can be particularly volatile around holidays.

Continuing claims, a proxy for the number of people receiving benefits, fell to 1.94 million in the previous week, according to Labour Department data released Thursday (December 4).

Many employers have sharply pulled back on hiring in recent months, and some large corporations — including HP Inc. and FedEx Corp. — have announced job cuts. Even so, Thursday’s data suggests actual layoffs remain limited, helping to allay concerns about a rapid deterioration in the labour market.

While continuing claims retreated in the latest report, they remain near the highest since 2021. The low-hire, low-fire job market has kept a lid on initial applications for unemployment benefits, but it has also limited out-of-work Americans’ ability to find a new job.

US companies shed payrolls in November by the most in over two years, driven by small businesses, according to ADP Research data released Wednesday. That report, alongside the weekly claims figures, will help inform Federal Reserve officials as they decide whether to lower interest rates for a third-straight meeting next week.

Separate data out Thursday showed announced layoffs at US companies settled back last month after an October surge, but were still the highest for any November in three years.