2025-12-05
US Initial Jobless Claims Drop to Lowest Level in More Than Three Years
The latest data from the U.S. Department of Labor shows that for the week ending November 29, 2025, initial jobless claims unexpectedly fell by 27,000 to 191,000, a significant drop from the previous week’s 218,000. This represents a 12.4 percent decline from a year earlier and marks the lowest level since September 2022. The figure came in well below the market expectation of 220,000 and has now declined for four consecutive weeks, indicating that layoffs in the labor market continue to ease, countering earlier concerns from some independent surveys about weak employment conditions in November. The four-week moving average also fell from 224,250 to 214,750, a monthly decline of roughly 4.3 percent, further suggesting resilience in the job market.
Continuing claims for unemployment benefits edged down by 4,000 to 1.939 million, a slight decrease from the previous period but still relatively elevated. Initial claims by federal employees dropped to 1,125 from 1,724, down about 35 percent year over year, reflecting the fading impact of the government shutdown.
Short-term factors contributing to the decline in initial claims include:
Seasonal fluctuations during the Thanksgiving period reducing temporary layoffs.
Although corporate hiring is slowing, the pace of layoffs is also decreasing, keeping the labor market stable.
Large declines previously seen in states such as California and Georgia offset volatility in other areas, keeping continuing claims steady.
The fading impact of hurricanes and other short-term events, with data returning to normal levels.
Because seasonal adjustments around the Thanksgiving holiday are difficult to calibrate accurately, last week’s initial claims data may contain distortions.
Overall, the drop in initial jobless claims to a more-than-three-year low indicates reduced layoff pressure and helps alleviate recent concerns about weakening employment momentum. Over the next one to two months, the data is expected to fluctuate at a low level between 190,000 and 220,000, influenced by holiday effects and the typical year-end hiring slowdown. However, barring major shocks, the unemployment rate is expected to hold around 4.1 percent. In the medium term, as the Federal Reserve shifts policy and the economy improves, initial claims may gradually rise to around 270,000, though the overall job market is still expected to remain healthy and unlikely to trigger recession risks.
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