Tonight at 21:30, the United States will release the initial jobless claims data for the week of December 27, 2025. A survey by The Wall Street Journal shows that market forecasts predict this week's claims will reach 220,000, up from 214,000 the previous week.

Looking back at last week's data is quite interesting — for the week of December 20, initial claims surprisingly dropped from 224,000 to 214,000, well below the market expectation of 223,000, hitting a new low since January. This is the second consecutive week of decline. At first glance, it seems like good news — fewer layoffs.

But there is a contradiction here. Meanwhile, the number of people continuing to receive unemployment benefits (those still receiving aid) has actually increased for the second week in a row, now reaching 1.92 million. Economists call this phenomenon "no hiring, no firing" — neither large-scale hiring nor large-scale layoffs, leaving the labor market in a stable but stagnant state.

So what does this mean for the market and the Federal Reserve?

An increase in initial jobless claims usually benefits the Nasdaq in the short term and reinforces market expectations of a rate cut by the Federal Reserve. But this time, the impact may be limited. The market generally expects the Fed to hold steady in January, as policymakers wait for more data.

The key point here is: according to analysis from U.S. banks, the unemployment rate would need to rise from the current 4.6% to 4.7% to truly trigger a rate cut by the Fed in January. Initial jobless claims are a leading indicator for observing unemployment rate trends.

It’s worth noting that Fed Chair Powell recently stated that recent employment data might be "distorted" due to statistical issues, meaning its credibility is questionable. Therefore, the Fed will not focus solely on a single data point but will make decisions after a comprehensive assessment of overall economic data in December, including inflation, employment, and growth. A single week's initial claims data cannot change the overall direction.