US jobless claims jump by most since 2020 after holiday drop

US jobs

Applications for US unemployment benefits rose last week by the most since the onset of the pandemic, after a big drop during the Thanksgiving holiday week.

Initial claims increased by 44,000 to 236,000 in the week ended Dec. 6, according to Labor Department data released Thursday. That was the biggest jump since March 2020 and followed the lowest level of applications in more than three years in the previous week. The figure exceeded all but one estimate in a Bloomberg survey of economists.

Weekly initial claims tend to be choppy around the holidays and will likely continue to fluctuate through the end of the year, but Thursday’s figures are toward the higher end of readings seen in 2025. Companies like PepsiCo Inc. and HP Inc. have laid out plans to reduce headcount in recent weeks, and nationwide layoffs in October were the highest since early 2023.

The four-week moving average of new applications, a metric that helps smooth out volatility, ticked up to 216,750 last week.

Concerns about the labor market have weighed on consumer sentiment in recent months. A majority of respondents in a preliminary December survey by the University of Michigan expect unemployment to rise in the coming year.

Federal Reserve officials lowered interest rates for a third straight meeting Wednesday to support what Chair Jerome Powell called a “gradually cooling” labor market. While officials didn’t project higher unemployment next year compared to their September forecasts, Powell said the job market faces “significant” downside risks.

Before adjusting for seasonal factors, initial claims surged last week by nearly 115,000, also the most since March 2020. That was led by populous states like California, Illinois, New York and Texas.

Continuing claims, a proxy for the number of people receiving benefits, dropped to 1.84 million in the week ended Nov. 29, which included Thanksgiving. That was the biggest decline in four years.