New applications for U.S. unemployment benefits unexpectedly fell last week, but signs of a sluggish labor market suggest the unemployment rate is likely to remain high in December.
Initial claims fell to 214,000, beating market expectations, but the data remained volatile ahead of the holiday season and reflected sluggish hiring.
Despite strong economic growth in the third quarter, the labor market has been near a standstill, with import tariffs and immigration actions weighing on both demand and supply of labor.
Claims continued to rise to record levels, in line with surveys showing consumer sentiment toward the job market deteriorating.
In this context, the Federal Reserve remained cautious after cutting interest rates, waiting for further clarity on the labor market and inflation before easing policy more aggressively.
