Key Takeaways

• There were 242,000 new claims for unemployment benefits last week, up 17,000 from the week before.

• That was the highest since October, although still relatively low by historic standards.
  

• Economists take individual weeks of unemployment data with a grain of salt, since it tends to rise and fall sharply from week to week, especially around the holidays.
  

In a fresh sign that the labor market could be slowing down, new unemployment claims rose to a two-month high last week.

That's according to the Department of Labor, which said Thursday that 242,000 people filed for unemployment benefits the week ending Dec. 7, an increase of 17,000 from the previous week. That was the highest since October. Setting aside a spike in October due to hurricanes Helene and Milton, it was also the highest since July. According to a survey of economists by Dow Jones Newswires and The Wall Street Journal, it was also above the consensus forecast for 220,000 claims.

While the number of claims wasn't high by historical standards, and other data shows unemployment remaining relatively low, the uptick could be one of several indicators of a job market slowdown if it proves to be a sustained trend. Employers have pulled back on job openings in recent months, and hiring has slowed as employers continue to grapple with high borrowing costs for business loans amid high interest rates set by the Federal Reserve.

However, economists are usually skeptical of reading too much into data from any one week, especially around the holidays, which can mess with data and make it hard to discern underlying trends.

"Claims are always volatile over the holidays, through mid-January, so it’s even more important than usual to look at the trend rather than single week’s numbers," Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, wrote in a commentary.

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