Jobless claims rose for second straight week after ticking up before Christmas

The number of initial jobless claims rose the week before Christmas as the once-hot labor market continues to cool, according to U.S. Labor Department data released Thursday.

Initial applications for unemployment benefits rose by 12,000 to 218,000 for the week ending Dec. 23.

Ohio, Oklahoma, Michigan, Connecticut and Massachusetts saw the largest increase in initial claims from the previous week, while California, Georgia, Pennsylvania, Arkansas and Minnesota saw the largest decreases.

While the new claims data marks the second straight jump in jobless claims, the four-week average of claims — which can smooth out volatility — fell by 250 to 212,000.

“Initial jobless claims ticked up last week but remain near this year’s lows while continuing claims resumed their upward trend,” Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research, wrote on X, formerly Twitter.

The latest figures exceeded some economists’ expectations. Economists polled by Reuters expected to see 210,000 initial jobless claims last week, while economists polled by The Wall Street Journal forecasted 215,000.

The uptick in initial jobless claims is the latest sign the U.S. economy is coming into balance after a chaotic post-pandemic surge in hiring.

Job openings jumped in 2022, and the annual jobless rate fell to record lows, according to the Bureau of Labor Statistics’ recent Work Experience of the Population report.

That surge in hiring coincided with rampant inflation, which peaked at 9 percent in June. The Federal Reserve hiked interest rates to 22-year highs over the summer as part of its nearly two-year rate hike crusade to bring down high prices.

The rise in interest rates has helped bring down inflation, and high borrowing costs have forced companies to tighten their belts. That’s hurt Americans who found themselves out of work but has helped rebalance the labor market, something Fed Chair Jerome Powell has said the rate-setting panel at the central bank was watching as it decides whether or not to cut interest rates.