US jobless claims drop to 45-year low
The number of Americans filing for unemployment benefits fell to a near 45-year low last week, pointing to strong job growth in February, which should continue to underpin the economy.
Initial claims for state jobless benefits fell 7,000 to a seasonally adjusted 222,000 for the week ended February 17, the Labor Department said yesterday. Claims fell to 216,000 in mid-January, which was the lowest level since January 1973.
Claims for six states, including California, were estimated because of Monday’s Presidents Day holiday. While that probably distorted last week’s data, the underlying trend in claims was consistent with a robust labor market.
“Firms are extraordinarily unwilling to part company with workers reflecting, in all likelihood, the difficulty of replacing them,” said John Ryding, chief economist at RDQ Economics in New York.
Economists polled by Reuters had forecast claims flat at 230,000 in the latest week. It was the 155th straight week that claims remained below the 300,000 threshold, which is linked with a strong labor market. That is the longest such stretch since 1970, when the labor market was much smaller.
The labor market is near full employment, with the jobless rate at a 17-year low of 4.1 percent. Tightening labor market conditions are starting to push up wage growth, which could help to lift inflation toward the Federal Reserve 2 percent target.
Minutes of the US central bank’s January 30-31 policy meeting published on Wednesday showed policymakers upbeat in their assessment of the economy and a number “judged that the continued tightening in labor markets was likely to translate into faster wage increases at some point.”