The number of Americans filing recent applications for jobless benefits unexpectedly rose last week and more people continued to collect unemployment checks at the complete of November relative to the beginning of the year as demand for labor cools.

Initial claims for state unemployment benefits increased 17,000 to a seasonally adjusted 242,000 for the week ended Dec. 7, the Labor Department said on Thursday. Economists polled by Reuters had projection 220,000 claims for the latest week.

Last’s week jump in claims likely reflected volatility after the Thanksgiving holiday and likely does not mark an abrupt shift in labor economy conditions.

Claims are likely to remain volatile in the weeks ahead, which could make it challenging to get a obvious read of the labor economy. Through the volatility, the labor economy is slowing.

Though job growth accelerated in November after being severely constrained by strikes and hurricanes in October, the unemployment rate ticked up to 4.2% after holding at 4.1% for two consecutive months.

Holiday deals: Shop this period’s top products and sales curated by our editors.

Labor economy:Is labor economy bouncing back? Here’s what the November jobs update inform us.

An easing labor economy makes it more likely that the Federal safety net will cut gain rates next week for the third period since it embarked on its policy easing pattern in September, despite little advancement in lowering expense boost down to its 2% target in recent months.

The U.S. central financial institution’s point of reference overnight gain rate is now in the 4.50%-4.75% range, having been hiked by 5.25 percentage points between March 2022 and July 2023 to tame expense boost.

A stable labor economy is critical to keeping the economic expansion on track. Historically low layoffs account for much of the labor economy stability, and have driven buyer spending.

The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 15,000 to a seasonally adjusted 1.886 million during the week ending Nov. 30, the claims update showed.

The elevated so-called continued claims are a sign that some laid-off people are experiencing longer bouts of unemployment.

The median duration of unemployment spells rose to the highest level in nearly three years in November.

Reporting by Lucia Mutikani; Editing by Chizu Nomiyama