US jobless claims tick down to 209,000 during holiday week

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• US jobless claims fell to 209,000, indicating labor market stability.
• Continuing claims fell to 1.83 million, the lowest since September 2024
• Fed kept rates unchanged as labor market shows signs of steadying

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Applications for US unemployment benefits were little changed last week, adding to evidence of some stabilization in the labor market.

Initial claims edged down by 1,000 to 209,000 in the week ended Jan. 24, after an upward revision to the previous week, according to Labor Department data released Thursday. The median forecast in a Bloomberg survey of economists called for 205,000 applications.

The period included Martin Luther King Jr. Day and was marked by severe winter storms across many parts of the country. The data tend to fluctuate around holidays and inclement weather, when people are temporarily unable to work.

With hundreds of thousands of people still without power, there’s a risk that businesses will be disrupted for longer and potentially prompt more people to seek unemployment assistance. More broadly, the labor market has shown some signs of steadying recently, leading the Federal Reserve to leave interest rates unchanged this week.

Fed Chair Jerome Powell acknowledged that trend, while also noting some signs of continued cooling. He pointed to a recent report from the Conference Board in particular, which showed that consumers’ assessment of job availability worsened in January.

While layoffs are generally low, companies including Amazon.com Inc. and United Parcel Service Inc. have recently laid out additional plans to cut jobs on top of previous announcements in 2025.

What Bloomberg Economics Says...

“Jobless claims remain low, signaling muted seasonal hiring and firing. Alongside other high-frequency indicators, the latest print reinforces the picture of solid economic momentum, with little evidence of near-term softening.” — Eliza Winger.

Continuing claims, a proxy for the number of people receiving benefits, fell to 1.83 million in the week ended Jan. 17, the lowest since September 2024.

The four-week moving average of new applications, a metric that helps smooth out volatility, rose slightly to 206,250 last week.

Before adjusting for seasonal factors, initial claims fell by more than 41,000 last week. California and Michigan saw the largest declines.

Separate data Thursday showed the US trade deficit widened in November from the lowest level since 2009 as imports rebounded and exports fell.