Unemployment Claims Hit 11-Month Low Amid Sluggish Hiring and Economic Uncertainty

New applications for unemployment benefits in the U.S. fell to an 11-month low, indicating a stable labor market. However, hiring has slowed, and long periods of unemployment are increasing for laid-off workers. Economic uncertainty and proposed political changes are affecting financial markets and the Federal Reserve's interest rate policies.

In a sign of a stable labor market, the number of Americans filing new unemployment claims has dropped to an 11-month low. However, a slowdown in hiring has resulted in prolonged unemployment spells for some. Amid high inflation, economists suggest this trend could help the Federal Reserve maintain current interest rates.

The Federal Reserve, which last month envisioned fewer rate cuts than initially forecast, may continue with caution. Fed Governor Christopher Waller noted further cuts might emerge, cautioning that rates will adapt based on inflation control without weakening employment.

While the Labor Department reports a seasonal adjustment, the low claims signify ongoing labor market stability. Despite low layoffs, economists note a hiring slowdown, worrying that extended unemployment spells could persist. Investor sentiment reflects market uncertainty as political and economic changes loom.

(With inputs from agencies.)