US Jobless Claims Dip, But Rising Long-Term Aid Clouds Fed Outlook
Initial claims fell to 220,000, but continuing claims surged to their highest level in four years, presenting a mixed picture of the U.S. labor market.
WASHINGTON – The U.S. labor market sent a mixed and potentially conflicting signal to investors and the Federal Reserve on Thursday, as the number of new applications for unemployment benefits fell while the total number of people receiving aid climbed to a four-year high.
Initial jobless claims for the week ending November 15 dropped to 220,000 on a seasonally adjusted basis, according to a Department of Labor report released Thursday. The figure came in just below economists' consensus forecast of 223,000, suggesting employers are still reluctant to lay off staff in large numbers.
However, the report also contained a note of caution. So-called continuing claims, which measure the number of people actively receiving unemployment benefits, rose to 1.974 million. This marks the highest level since November 2021 and indicates that while layoffs remain relatively low, unemployed workers are finding it increasingly difficult to secure new positions.
The conflicting data points complicate the narrative of a cooling but still-resilient economy, a picture the Federal Reserve is watching closely as it weighs its next move on interest rates. A persistently tight labor market could fuel wage inflation, giving the central bank reason to hold rates higher for longer. Conversely, evidence of rising long-term unemployment suggests underlying weakness that could justify an earlier-than-expected rate cut.
“On the surface, the drop in initial claims looks like a sign of strength,” said one market analyst. “But the steady climb in continuing claims tells a different story. It points to a hiring environment that is losing momentum, which is a key leading indicator for the broader economy.”
This nuanced picture is unlikely to sway Fed officials who have remained publicly reluctant to signal a definitive pivot toward monetary easing. The headline figure for initial claims remains well below levels historically associated with a significant economic downturn.
Still, some economists argue the trend is more important than the absolute number. Analysts at Goldman Sachs have maintained their forecast for a rate cut in December, pointing to what they see as “genuine” weakness building within the job market.
Investors will now turn their attention to the upcoming monthly jobs report and fresh inflation data for a clearer signal on the economy's trajectory heading into 2026. Until then, the mixed signals from the labor market are likely to fuel the ongoing debate over the timing and necessity of the Federal Reserve’s next policy shift.