by Timothy McQuiston, Vermont Business Magazine Vermont weekly unemployment claims are at their usual and relatively high and volatile level for the holiday season. For the week ending December 13, 2025, new claims were 528. New claims were down 56 from the week before and are up 27 from last year at this time. Claims were 186 in September. Claims, which tend to be lowest in the summer, were 181 at the end of September 2024 and 186 last September. Claims tend to rise and fall around the holidays with temporary work hires and layoffs.
Meanwhile, the Federal Reservice Bank lowered interest rates December 10 as expected 25 basis points, in a split vote, with one Trump appointee calling for 50 basis points and two others voting for no change. Employment data indicates weakness. Meanwhile, inflation fell another one-tenth to 2.7%, though that drop could be due to a "technical factors." While the inflation mark is higher than the 2.0% Fed target, Fed governors appear to have weighed the economic uncertainty greater than the inflation level (the Fed raised rates seven times in 2022 from 0.25% to 4.5% to combat spiking inflation while the underlying economy remained strong; the Fed could decide that the reverse is the case now and cut rates further in 2026).
The US unemployment rate rose two-tenths to 4.6% in November, its highest rate in four years.
Adding to the uncertainty mix, Fed Chair Jerome Powell said the economy was relatively strong, which would have suggested that the rate not change given the inflation number. Powell's term ends early next year. The cut decreased the Fed’s federal funds rate down to a range of 3.50% to 3.75%, the lowest it has been since 2022. There is general consensus that the rate will not come down at the next meeting.
The stock market at first jumped at the rate-cut news, wobbled as AI values fell before finishing the week on a high note.
See below.
In Vermont for the weekly labor UI claims report, manufacturing accounted for 16% of the total, up 10 points from the previous week. Manufacturing overall has become a smaller part of the Vermont economy over the last 25 years and that trend appears to be continuing. The Service industry, which typically accounts for the most claims, last week reported 32% from the previous week, down 17 points. Construction was 36%, up 9 points.
Service hiring is strong during the holidays as cold weather slows down construction.
For the week, Vermont total unemployment insurance claims were 3,265 (down 407 for the week and up 217 from this time last year).
According to the US Department of Labor, for the week ending December 13, the advance figure for seasonally adjusted initial claims was 224,000, a decrease of 13,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 236,000 to 237,000. The 4-week moving average was 217,500, an increase of 500 from the previous week's revised average. The previous week's average was revised up by 250 from 216,750 to 217,000.
Reuters reported that the number of Americans filing new applications for unemployment benefits increased by the most in nearly 4-1/2 years last week, but the surge likely does not suggest a material weakening in labor market conditions, as the claims data are volatile around this time of year.
Meanwhile, the Vermont Unemployment Trust Fund is well capitalized. As of the most recent data, there was $324.7 million in the Trust Fund, down over $1 million from the previous week (as claims are paid out on one side, employers are contributing to the fund on the other). The pre-pandemic Trust Fund balance on March 1, 2020, was $506.2 million.
The US DOL has resumed collecting labor information following the end of the government shutdown.
Vermont’s unemployment rate held at 2.5% in September as numbers sour
The Vermont Department of Labor on December 11 reported the seasonally adjusted unemployment rate for September 2025 was 2.5%. This reflects no change from August’s revised estimate. However, the Labor and Employment indicators both fell.
Vermont has the second lowest rate in the nation, tied with Hawaii and five-tenths below South Dakota. California is highest at 5.6%. The comparable United States rate in September was 4.4 percent, an increase of one-tenth of one percentage point from the revised August estimate.
The civilian labor force participation rate was 64.4 percent in September, a decrease of two-tenths of one percentage point from the prior month’s revised estimate.
The government shutdown from October 1 to November 12, 2025, the longest in U.S. history, disrupted labor data accrual.
Markets
The Dow, S&P and NASDAQ finished the week on an up note after sharp declines as the value of AI shares rose, fell and rose again in wild swings. The even keel S&P finished strong on Friday to finish the week ahead at 6,834.50, close to its high last week. The Dow was down for the week and down over the last month to 48,134.89 (December high is 48,704 and November was 48,255). The always jittery NASDAQ was up Friday over 300 points to 23,307.62, after losing ground the last two months.
Investors focused on a report from job placement firm Challenger, Gray & Christmas showing announced job cuts in November from U.S. employers moved further ahead of 1 million for the year as corporate restructuring, artificial intelligence and tariffs helped pare job rolls. On Wednesday, numbers from ADP revealed a surprising slump in private payrolls, "The US lost an average of 4k private-sector jobs per month over the last 3 months (ADP data), the first 3-month decline since the 2020 recession.”
Mounting signs that the labor market is softening has led Wall Street to be convinced the Fed will cut rates a quarter percentage point at its December 10 meeting, the last of the year. Markets are pricing in an 89% chance of a cut next Wednesday, far higher than just a couple weeks ago, according to the CME FedWatch tool.
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