Jobless Claims Fall to Lowest Level Since 1973
The number of Americans submitting applications for jobless benefits unexpectedly declined last week to match the fewest in four decades.
Initial unemployment claims dropped by 7,000 to 255,000 in the week ended Oct. 10, a Labor Department report showed Oct. 15. The median forecast of economists surveyed by Bloomberg News called for 270,000 applications. The decline brought the monthly average to its lowest level since December 1973.
“These numbers are pretty impressive,” said Brian Jones, senior U.S. economist at Societe Generale in New York, who correctly projected the number of applications. “Both the initial and continuing claims numbers are consistent with the fact that we have a labor market that’s fairly tight and continues to improve.”
Steady domestic demand even in the face of tepid global growth is encouraging managers to maintain head counts. At the same time, additions to payrolls have slowed the past two months as diminished economic prospects abroad prompt some employers to limit hiring.
Jobless claims matched the low reached in July — the fewest since November 1973. Estimates in the Bloomberg survey of 45 economists for this week ranged from 255,000 to 275,000. The number of applications in the previous week was revised to 262,000 from an initially reported 263,000.
No states were estimated last week, and nothing unusual was in the data, according to the Labor Department.
The four-week average of claims, a less-volatile measure than the weekly figure, decreased to 265,000 from 267,250 in the prior week.
The number of people continuing to receive jobless benefits declined by 50,000 to 2.16 million in the week ended Oct. 3, the lowest level since November 2000. The unemployment rate among people eligible for benefits held at 1.6%. These data are reported with a one-week lag.
Claims, since the beginning of March, have held below the 300,000 level that economists say is consistent with strength in the labor market.
While dismissals have remained limited, hiring managers have pulled back on adding to staffs amid sluggish global growth. Employers took on 142,000 workers in September, and Labor Department revisions to the data subtracted 59,000 jobs from the prior two months. Wages stagnated, and the jobless rate held at a seven-year-low 5.1% as Americans left the workforce.
Federal Reserve policymakers are weighing growth, inflation and labor-market data as they debate whether to raise the benchmark interest rate this year for the first time since 2006. The officials next meet Oct. 27-28.
