The US Continuing Jobless Claims for December 2025 registered at 1.88 million, a decline from November’s 1.91 million and slightly below the consensus estimate of 1.89 million, according to the latest release from the Sigmanomics database. This figure reflects the number of individuals receiving unemployment benefits for more than one week, serving as a critical gauge of labor market health.

Drivers this month

• Seasonal adjustments following holiday hiring cycles contributed to the modest decline.
• Improved consumer spending supported job retention in retail and services.
• Manufacturing sector layoffs remained contained despite global supply chain pressures.

Policy pulse

The reading remains consistent with a labor market that is cooling but not weakening sharply. This aligns with the Federal Reserve’s ongoing monetary tightening stance aimed at tempering inflation without triggering a recession.

Market lens

Markets responded with mild optimism, as the data suggested resilience in employment. Short-term Treasury yields edged lower, reflecting tempered recession fears, while the US dollar showed slight strength amid expectations of continued Fed vigilance.

Continuing Jobless Claims serve as a vital labor market indicator, complementing initial claims and payroll data. December’s 1.88 million figure compares favorably with November’s 1.91 million and is below the recent peak of 1.96 million recorded in late November 2025. However, it remains above the 12-month average of roughly 1.92 million, indicating persistent, though moderate, labor market slack.

Historical context

• August 2025: 1.94 million
• September 2025: 1.90 million
• October 2025: 1.87 million
• November 2025: 1.91 million
• December 2025: 1.88 million

Monetary policy & financial conditions

The Federal Reserve’s restrictive monetary policy, with interest rates elevated to combat inflation, has slowed hiring momentum. Financial conditions remain tight, with credit spreads slightly wider and borrowing costs elevated, which may constrain business expansion and hiring.

Fiscal policy & government budget

Fiscal stimulus has waned compared to earlier pandemic years, with government budgets tightening amid rising debt servicing costs. This limits the scope for direct labor market support, placing more emphasis on private sector resilience.

What This Chart Tells Us

Market lens

Immediate reaction: US Treasury yields on the 2-year note declined by 3 basis points, while the US dollar index strengthened by 0.15% in the first hour post-release. Equity markets showed mild gains, reflecting relief at the absence of a sharp labor market deterioration.

Looking ahead, the labor market faces several headwinds and opportunities. The Federal Reserve’s monetary policy trajectory remains a key determinant. If inflationary pressures ease, the Fed may pause rate hikes, supporting employment. Conversely, persistent inflation could prompt further tightening, risking higher unemployment.

Bullish scenario (20% probability)

• Inflation falls faster than expected, allowing the Fed to ease policy.
• Jobless claims decline below 1.80 million by mid-2026.
• Consumer confidence and spending rebound, boosting hiring.

Base scenario (60% probability)

• Claims hover around 1.85–1.90 million through H1 2026.
• Gradual labor market cooling without recession.
• Monetary policy remains restrictive but stable.

Bearish scenario (20% probability)

• Inflation remains sticky, forcing further Fed tightening.
• Claims rise above 2 million, signaling rising layoffs.
• Economic growth slows sharply, increasing unemployment.

December 2025’s Continuing Jobless Claims data from the Sigmanomics database highlights a labor market that is resilient but cautious. The modest decline in claims suggests employers are managing costs without widespread layoffs. However, ongoing monetary tightening, fiscal constraints, and external risks such as geopolitical tensions and supply chain disruptions could challenge this balance.

Financial markets have priced in a cautious optimism, but volatility remains a risk. Structural trends, including automation and shifting labor force participation, continue to reshape employment dynamics. Policymakers must navigate these complexities to sustain growth while containing inflation.

Key Markets Likely to React to Continuing Jobless Claims

The Continuing Jobless Claims data is closely watched by markets sensitive to US labor market health. Key symbols historically correlated with this indicator include:

• SPY – Tracks broad US equity market sentiment, sensitive to labor market shifts.
• USDEUR – Reflects US dollar strength, influenced by Fed policy expectations tied to employment data.
• USDJPY – A key currency pair reacting to risk sentiment and US monetary policy.
• BTCUSD – Bitcoin often reacts to macroeconomic uncertainty and liquidity conditions.
• TSLA – Sensitive to consumer demand and broader economic trends impacting employment.

FAQs

What are Continuing Jobless Claims?

Continuing Jobless Claims measure the number of people receiving unemployment benefits after their initial claim, indicating ongoing unemployment levels.

How does this data affect monetary policy?

Higher claims suggest labor market weakness, potentially prompting the Fed to ease policy. Lower claims support tighter policy to control inflation.

Why compare month-over-month and year-over-year?

MoM comparisons capture short-term trends, while YoY comparisons provide context on longer-term labor market shifts.

Takeaway: December’s continuing claims data points to a labor market that is stabilizing but remains vulnerable to tightening financial conditions and external shocks. Policymakers and markets will watch upcoming data closely for signs of sustained improvement or deterioration.