US Jobless Claims Plunge Below 200,000 Amid Low Layoffs, But Labor Market Softens

• US jobless claims dropped by 16,000 to 199,000 for the week ending December 27, falling below the 200,000 mark and analyst expectations.
• Despite historically low layoffs, the labor market shows signs of softening, with the unemployment rate rising to 4.6% in November, the highest since 2021.
• Job creation has slowed significantly, averaging 35,000 jobs per month since March, down from 71,000 in the preceding year.
• The Federal Reserve cut its benchmark lending rate for the third consecutive time, citing concerns about a potentially weaker labor market and possible downward revisions to employment data.
• Major companies like UPS, General Motors, Amazon, and Verizon have recently announced job cuts, contributing to the mixed signals in the labor market.

Why It Matters: US jobless claims hit a low, yet broader labor market indicators suggest a notable slowdown.