WASHINGTON, Jan 8 (Reuters) – The number of Americans filing new applications for unemployment benefits rose moderately last week, suggesting that layoffs were relatively low at the end of 2025, though demand for labor remained sluggish.
Initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 208,000 for the week ended December 27, the Labor Department said on Thursday. Economists polled by Reuters had forecast 210,000 claims for the latest week.
Claims have been choppy in recent weeks amid challenges adjusting the data for seasonal fluctuations around the year-end holiday season. Through the volatility, layoffs have remained low by historical standards.
Employers have been reluctant to boost headcount amid tariff-related uncertainty and growing popularity of artificial intelligence, but they have not engaged in mass firings of workers, keeping the labor market in a state of paralysis.
While a separate report from global outplacement firm Challenger, Gray & Christmas showed layoffs announced by U.S.-based employers jumped 58% to a five-year high of 1.206 million in 2025, cost cutting by the federal government and technology companies accounted for the bulk of the planned reductions.
“Technology has been pivoting to both developing and implementing artificial intelligence much more quickly than any other industry,” said Andy Challenger, chief revenue officer at Challenger, Gray & Christmas. “This coupled with over-hiring over the last decade created a wave of job loss in the industry.”
Hiring plans dropped 34% to 507,647 last year, the lowest level since 2010. Lackluster hiring means more unemployed people are experiencing long bouts of joblessness.
The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 56,000 to a seasonally adjusted 1.914 million during the week ended December 20, the claims report showed.
The government reported on Wednesday that job openings dropped to a 14-month low in November. There were 0.91 job openings for every unemployed person in November, the lowest level seen since March 2021, and down from 0.97 in October.
The claims data have no bearing on December’s employment report due to be released on Friday.
Nonfarm payrolls probably increased by 60,000 jobs last month after rising 64,000 in November, a Reuters survey of economists predicted. But the focus is likely to be on the unemployment rate, estimated to have slipped to 4.5% after accelerating to more than a four-year high of 4.6% in November.
The November unemployment rate was partially distorted by the 43-day federal government shutdown, which also prevented the collection of household data for October. The unemployment rate for October was not published for the first time since the government started tracking the series in 1948.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci and Chizu Nomiyama)
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