Jobless Claims Unexpectedly Drop to Lowest Level Since 1973
Jobless claims unexpectedly decreased to the lowest level since 1973, indicating the U.S. labor market remains a pillar of support in the world’s largest economy.
New applications for unemployment benefits fell by 6,000 to 247,000 in the week ended April 16, data from the Labor Department showed April 21. The median forecast of economists surveyed by Bloomberg News called for 265,000 claims. The number of Americans already on benefit rolls declined to a more than 15-year low.
Limited dismissals signal that employers are still optimistic about the U.S. demand outlook. The drop in claims occurred in the same week as the Labor Department surveys for the monthly employment report, and economists are banking on further job growth to support consumer spending and help prop up economic growth after a weak first quarter.
“Claims are probably the single best indicator of the health of the economy,” said Mike Englund, chief economist at Action Economics in Boulder, Colorado, whose forecast for 252,000 was among the lowest in the Bloomberg survey. “We assume the labor market will continue to outperform most measures.”
Economists’ estimates in the Bloomberg survey for weekly jobless claims ranged from 245,000 to 285,000. Filings, which are the lowest since the week ended Nov. 24, 1973, fell from an unrevised 253,000.
While claims were estimated for Washington, D.C., there was nothing unusual in the data, according to the Labor Department.
The four-week moving average of claims, a less volatile measure than the weekly figures, decreased to 260,500 from 265,000. Last week included the 12th of the month, which coincides with the period the Labor Department surveys employers to calculate monthly payroll data. The average was little changed from the 259,500 during the comparable period in March.
The number of people continuing to receive jobless benefits fell by 39,000 to 2.14 million in the week ended April 9, the fewest since November 2000. The unemployment rate among people eligible for benefits held at 1.6%. These data are reported with a one-week lag.
First-time claims have held below 300,000 — a level economists typically associate with robust labor conditions — for 59 consecutive weeks, the longest such stretch since 1973.
Initial jobless claims reflect weekly firings, and a sustained low level of applications has typically coincided with faster job gains. Layoffs can also reflect company- or industry-specific causes, such as cost-cutting or business restructuring.
Intel Corp., the world’s biggest semiconductor company, is eliminating 12,000 jobs as it looks to limit its dependence on the shrinking personal-computer market and shift focus to areas such as chips for data-center machines and internet-connected devices.
The cuts amount to 11% of the company’s workforce and will be the biggest since Intel reduced staffing between 2005 and 2009, when it was responding to the global financial crisis and competition that wiped out growth.
