DECEMBER 8, 2025 – – UNEMPLOYMENT CLAIMS FALL, INFLATION 2.8 PERCENT

Claims for unemployment benefits during the Thanksgiving week fell to the lowest level in more than three years. New claims came in at 191,000 down from the previous week’s claims of 218,000. Expectations were for 221,000. The data may not be accurate due to the holiday-shortened week, but is still indicative of a slowdown in layoffs, as companies take a wait-and-see approach toward staffing changes.

The Fed’s preferred inflation gauge, the core personal expenditures consumption index, for September was released Friday. It was up 0.2 percent for the month, or 2.8 percent for the year. This was slightly below the 2.9 percent reported in August.

The slowdown in layoffs may complicate the Fed’s decision on lowering interest rates at this week’s regularly scheduled meeting. With the employment situation relatively stable, the urgency to bring rates down to support the job market has waned. Inflation continues to run well above the Fed’s 2 percent target.

If the Fed reduces rates this week, it will be the third time in 2025, prioritizing stability in the job market over stubbornly high inflation.