As of last week, the number of initial claims for unemployment benefits in the USA fell to its lowest level in a month, which relates to the USA.Non-farm Employment DataOccasionally showing signs of slight cooling, but the overall labor market in the USA remains robust. The U.S. Department of Labor stated on Thursday that for the week ending December 21, the number of initial unemployment claims decreased by about 1,000 compared to the previous statistical week, adjusted for seasonality, totaling 0.219 million, better than economists' overall expectations of 0.224 million.

The latest statistics on continued unemployment claims reached the highest level in over three years, indicating that unemployed individuals are taking longer to find jobs. The continuous decline in initial claims for unemployment benefits shows that very few companies are choosing layoffs; many companies still prefer to raise salaries to retain high-quality employees. These two latest pieces of data outline a picture of slight cooling in the labor market, but there has yet to be a 'labor force gap' that threatens the USA's economy.

Data shows that for the week ending December 14, the number of continued unemployment claims unexpectedly increased by 0.046 million, adjusted for seasonality, approximately 1.91 million, reaching the highest level since November 2021, exceeding economists' overall expectations of 1.88 million. This data aligns with other economic information indicating that it has become increasingly difficult for unemployed individuals in the USA to find jobs compared to the high inflation period over the past two years.

Federal Reserve Chairman Jerome Powell stated last week that the USA's labor market remains 'in good condition,' although the Federal Reserve policymakers are closely monitoring any signs of labor market deterioration. During a news conference following the interest rate decision, Powell remarked that the USA's labor market is slightly cooling but will not trigger concerns about a labor market collapse or economic recession.

A series of economic data this year, including strong Consumer spending, stubborn service inflation, overall stable unemployment rate, and consistently low initial unemployment claims Statistics, indicate significant warming of inflation in the USA and a relatively healthy labor market.

Although the Federal Reserve announced a rate cut as the market expected, the latest "dot plot" shows that the expectation for rate cuts in 2025 has been drastically reduced from four times announced at the end of last quarter to two times, and expectations for interest rates in 2026 and the market-focused "neutral rate" have been adjusted upward, forcing the market to reprice rate cut expectations. Some Federal Reserve officials have even started to factor in the expected policies under Trump, which indicates a hawkish rate perspective shown in the "dot plot", as well as the Federal Reserve's economic outlook indicating that PCE inflation is far above the expectations from last quarter, along with Federal Reserve officials anticipating that the economic boosting measures introduced after Trump's inauguration will lead to sustained stability in the USA's unemployment rate, rather than trending downward as the market expects.

After the release of the dot plot and Powell's press conference, swap contract pricing for rate cuts next year has also been significantly reduced, even beginning to price in no rate cuts next year. A recent forecast by Deutsche Bank indicates that the bank expects the Federal Reserve to pause rate cuts for the entire year next year, and that the Federal Reserve's easing cycle is essentially stagnant.

Bloomberg Economics economist Elisa Winger stated after the unemployment claims data was released on Thursday: "The number of initial claims for unemployment benefits this year is lower overall, reflecting a low take-up rate of unemployment benefits — some individuals are unable to collect benefits due to ineligibility, while those who are eligible lack the motivation to apply for benefits, as they believe finding a job remains relatively easy. The number of individuals continually applying for unemployment benefits is increasing, and displaced workers face longer periods of unemployment, indicating a slight cooling of the labor market."

Editor/Jeffy