Layoffs Everywhere, But Jobless Claims are Dropping

The jobs market is absolutely collapsing with layoff announcements recently exceeding 1.1 million just this year to date, which is the most since 2020, but also the jobs market is doing better than ever because us jobless claims just fell to a three year low. So what in the world is going on here? Is the jobs market terrible? Is it amazing? Is everybody losing their jobs or is nobody losing their jobs? First, let's take a look at layoffs. So the layoff announcement comes from Challenger Gray and Christmas, which is a consulting firm, and they have counted up all of the layoff plans this year, which include 71,000 just in November. That brings the 2025 year to date total up to 1.17 million. The last time we exceeded 1.1 million was 2020, which is never a year that you want to be compared to. So a couple of things to note. Number one, these are layoff announcements. That means many of these have not actually happened yet. These are layoffs that are planned to happen soon or in the near future. When we look at companies, layoff announcements like Verizon's announcement from November, we can see that many of them are saying that AI is the reason they are laying people off. And so far, it looks like about 54,000 layoffs this year are attributed to AI. We're seeing tariffs were cited as a reason for about 8,000 layoffs. However, the labor department itself has not shown any surge in actual layoffs happening yet in the data. And that's where we moved to the second conflicting report here, which is jobless claims. So jobless claims in the U.S. just fell to a three year low over the Thanksgiving week. Just for clarification, jobless claims is initial jobless claims, and that's people who are filing for unemployment benefits. So this chart that you're looking at right here is the initial jobless claim going back all the way to December of 2021. You can see that since 2021 initial jobless claims, numbers are relatively consistent. We had a brief dip below. We had a brief dip below 200 back here in September of 2022. And we had a couple brief spikes above two 50, like in June of 23, August of 23, October of 24 and September of 2025, which means that this weekly dip below 200 may just be a blip on the radar, especially considering the fact that it was over a holiday week. If we move down to this chart, which is continuing jobless claims, we can see there is a significant decline in continuing jobless claims during 2022, a bottomed about halfway through the year. And then they started moving higher again towards the end of 2022. And then ever since about the end of 2023, they've stayed fairly consistent with another jump here around June of 2024. Again, they flatlined. And then we had another jump in about April of this year, 2025. And they've been the same again, since about June of 2025. So even if the significant drop in initial jobless claims is just a random thing, and it's not really statistically significant and doesn't result in any drop in continuing claims, we still see no big change in continuing claims despite the fact that 2025 layoffs have been extreme. So there are a couple of reasons for this disconnect. The first one we already talked about, which is these are layoff announcements. So many of the layoffs have not actually happened yet. The second reason is that many of these people who are getting laid off are just finding other jobs, whether they're working for themselves or they're going to get other jobs. They are not filing for unemployment benefits. One reason why these people may not be applying for unemployment benefits is because they may not be eligible. Many of these layoffs are happening in tech. Many of them could be mill upper management, especially the ones that are being attributed to AI, which means severance can come into play, which can impact your eligibility for unemployment insurance. Now these charts for both initial jobless claims and continuing jobless claims are zoomed in. So let's take a zoomed outlook to see what the numbers look like on a long-term chart that can give us some indication of where jobs are headed. As I always say, when in doubt, zoom out. The first chart we're looking at here is continued claims, and this is from the federal reserve. Now this one is seasonally adjusted, which is why the number looks so smooth. And you'll notice obviously the big spike in 2020 return to baseline. And now we're sitting right around this 1.9 million number. And before the big spike, we were around 1.6. So again, that's higher where we were at pre 2020. And it does look like it's trending a little bit higher, but no crazy spike. And if we zoom in on just the last couple of years, we get the same chart we were looking at before. So now let's take a look at what the same chart looks like when you remove the seasonal adjustment. And obviously for some data sets, this is why it's helpful to look at seasonal adjustment because you get all this volatility from the seasonality and the jumps and declines that are helpful to get smoothed out. Zooming in on just the last couple of years, we can see these continued claims. Once we've removed seasonal adjustment, you can't see as much of a recent increase. This looks well within the normal range of volatility. And if we want an even more smoothed out, look, we can look at the four week moving average, which is also seasonally adjusted zooming in on just the last couple of years, this four week moving average smooths the line now. And we can see again, we are trending up at no crazy spike, especially nothing like we saw at the end of 2022 moving into 2023. But to be perfectly honest, if you care about getting a job, you really don't care that much about how many people are filing for unemployment insurance. You don't care about initial or continuing jobless claims. You're concerned about losing your job and having the ability to get another job. Then what you'd want to look at is how many total people have jobs, because if that number is drastically moving down, that's a bad sign for that. We just need to look at the total employees number. So this chart is just that the total number of employees right now sitting at around 159 million people. Again, this is not the number of jobs because you could have one person working multiple jobs. This is the number of people who have jobs. You can see going back to 1940, this number generally goes up into the right. If we look at the past 10 years, we can see the big drop off that happened in 2020. And we are just about back up to the trend line where we were prior to that drop. And if we zoom in on just the last one year, we can see the total number of people who have jobs is still steadily rising again, zooming out to the past 10 years. We see it does look like that growth is smoothing out at least through September of 2025, but it is still generally climbing. Another wild card that could be impacting the discrepancy in some of these numbers could be deportations. And that is all I will say about that topic. You can draw your own conclusions about how deportations might impact the data for all of human history. The way that it has worked is that if you want somebody to give you money, you have to be able to provide them with something that is worth more to them than the money they are giving you, which means if you are not constantly learning and getting better and building more skills, there's a very high likelihood that somebody else will come along, whether it's a person or a robot that will learn the same skills you have and be willing to accept less money than you for the same job, which means you're replaced. Today is no different than any other time throughout history. Does it suck? Maybe. But if you are the person who is learning, continuing to build new skills and constantly upgrading yourself so that you can offer people something that they want more than the money you want in return, then you're probably not going to be the person struggling to get a job. It's always been that way and it always will be. As always, thank you so much for watching. Have a great day.