The number of initial jobless claims in the U.S. hit a seven-month low in July as the Fed's December rate cut speculation heats up
On November 26, 2025, the U.S. Department of Labor released key data ahead of schedule: for the week ending November 22, initial jobless claims unexpectedly fell to 216,000, a decrease of 6,000 from the previous week's revised figure, not only lower than the market expectation of 225,000 but also setting a new seven-month low since mid-April of this year. This better-than-expected performance overturned the forecast of a cooling job market, adding uncertainty to the policy direction of the Federal Reserve's December meeting.
As a "high-frequency barometer" of the labor market, initial jobless claims directly reflect corporate layoff dynamics and employment resilience. Data shows that this indicator has remained stable below 230,000 for several weeks, even though companies like Verizon and Amazon have had some local layoffs, the overall job market has not shown significant job cuts. Continued jobless claims rose slightly to 1,960,000, but the increase was limited, indicating that the reemployment channels for the unemployed are smooth, and the fundamentals of labor demand are solid, highlighting that the trend of "employers being cautious in layoffs and hiring" underscores the strong employment support for the U.S. economy.
After the data was released, global financial markets quickly adjusted expectations. The short-term U.S. dollar index rose by 0.2%, and gold prices fell by 0.3%, aligning with the traditional logic of "strong employment → delayed rate cuts." However, market sentiment quickly diverged, coupled with conflicting signals from the Fed's Beige Book showing stable economic activity but declining consumer spending. The CME's "FedWatch" tool indicated that the probability of a 25 basis point rate cut in December not only did not decrease but instead rose, reaching as high as 85% at one point.
The core of this game is the Fed's trade-off between "employment resilience" and "economic risks." Strong employment has alleviated the urgency of a "rescue-the-economy-style rate cut," and with core inflation not reaching the 2% target, policymakers have more room for observation; however, the consumer confidence index saw its largest decline in July, and the private sector unexpectedly cut 32,000 jobs in November, exposing the still fragile foundation of the economic recovery.
