December Non-Farm Payrolls Surge by 130,000, Dispelling Recession Shadows; 2025 Labor Market Ends with a Narrow Escape

US Continuing Jobless Claims Rebound to 1.844 Million, Strong Non-Farm Data Lowers Rate Cut Expectations

According to the latest DataTrack data, for the week ending January 23, 2026, US Continuing Claims were reported at 1.844 million, an increase of 17,000 from the previous week's 1.827 million. This data ended the downward trend of two consecutive weeks since early January (1.865 million on January 9 and 1.875 million on January 2), but the overall figure remains lower than the peak in the fourth quarter of 2025 (approximately 1.97 million), indicating that the labor market is in a consolidation and recovery phase after cooling down at the end of last year. Observing detailed items and related indicators, the rebound in continuing claims needs to be interpreted within the context of the broader employment report. According to Trading Economics and official data, US Non-Farm Payrolls (NFP) in January unexpectedly surged by 130,000, far exceeding market expectations of 70,000, and the unemployment rate fell back to 4.3%. This shows that despite weekly fluctuations in continuing jobless claims and frictional unemployment following corporate layoffs, overall hiring momentum has not cooled as rapidly as expected, with the healthcare and service sectors remaining key pillars of support. Regarding the data changes, analytical institutions generally believe this is a seasonal adjustment following the holidays. Analyses from JPMorgan and Trading Economics point out that while the labor market cooled somewhat in 2025, data at the beginning of 2026 (such as non-farm payrolls and the unemployment rate) show economic resilience. Continuing claims maintaining a level around 1.85 million reflect that while workers are holding onto jobs, the time required for career transitions or re-matching has lengthened slightly, though it has not yet deteriorated to recessionary levels. Looking ahead, continuing jobless claims may fluctuate within the 1.8 million to 1.9 million range in the short term (1-2 months). The market will watch closely to see if it breaches the 2 million threshold, which would be a warning signal of significant deterioration in the employment market. In the medium term (3-6 months), due to the strong January employment data, traders have lowered the probability of a Federal Reserve (Fed) rate cut in June to below 50%. If continuing claims remain at low levels, the Fed may maintain current interest rates for a longer period to ensure inflation remains under control. Related web search reference sources: https://tradingeconomics.com/united-states/continuing-jobless-claims https://www.straitstimes.com/business/traders-cut-odds-of-fed-rate-cut-in-june-after-january-jobs-surprise