New unemployment claims fell unexpectedly last week, according to a report released Thursday by the Labor Department. The decline followed a brief increase the week before and reversed a short-term upward trend.
Applications for unemployment benefits totaled 198,000 for the week. That figure was down 9,000 from the previous week’s revised total of 207,000. It also came in well below economists’ expectations of 215,000.
The drop followed a rise of about 8,000 claims the week before. Before that increase, claims had declined for three straight weeks through the holiday season in December.
Continuing claims, which track people already receiving unemployment benefits, also decreased. The number fell to 1.88 million from 1.9 million, suggesting fewer workers are staying unemployed for long periods.
The data adds to signs of a stabilizing labor market. Jobless claims had steadily declined late last year, easing concerns about widespread layoffs and job availability.
Recent employment data showed mixed results. The unemployment rate dipped slightly to 4.4% in December, while the U.S. added 50,000 nonfarm jobs, below economist forecasts but still an improvement from October’s job losses.
Investors and policymakers are now watching upcoming inflation data closely. The Bureau of Economic Analysis is set to release delayed inflation figures later this month, which could influence future Federal Reserve decisions.
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