Applications for new United States unemployment benefits surged by the largest amount since the pandemic, underscoring a volatile market at this time of year.
Initial claims jumped by 44,000 to 236,000 for the week ending 6 December, according to data from the Labor Department.
This marks the largest increase since March 2020 and follows the lowest level of applications in more than three years reported last week.
It was also higher than the 220,000 forecast by Reuters.
In the week ending 29 November, there were 192,000 claims, a decrease of 26,000.
The current dramatic increase can be partly attributed to difficulties adjusting data around the Thanksgiving holiday.
Economists also continue to describe the U.S. labour market in a “no hire, no fire” state, despite a slew of layoffs announced by major companies like Amazon.
The jump in claims suggests a gradual rise in the unemployment rate after it already rose to 4.4% in September from 4.3% in October.
The Fed’s recent Summary of Economic Projections estimated the jobless rate at 4.5% this year and easing slightly to 4.4% in 2026.
The Fed also cut its benchmark overnight interest rate by another 25 points to the 3.50% to 3.75% range; however, policymakers said they would likely pause further reductions in borrowing costs as they seek clearer signals about the direction of the job market.
According to the Bureau of Labor Statistics, there were an estimated 911,000 fewer jobs created in the 12 months through March than previously estimated, equating to 76,000 fewer jobs per month.
