The number of Americans filing new applications for jobless benefits fell more than expected to near a 42-year low last week, pointing to ongoing tightening in the labour market despite the recent slowdown in hiring.
The data released on Thursday provides an upbeat check on the health of the labour market after last week’s monthly employment report increased doubts the Federal Reserve would raise interest rates by the end of this year.
Initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 263,000 for the week ended October 3rd, the Labor Department said.
That was the lowest since mid-July when the number of claims was at its lowest since 1973. Hitting such a historical low is remarkable considering the US workforce has grown considerably since the 1970s.
It was also the 31st straight week that claims remained below the 300,000 threshold, which is usually associated with a strengthening labour market. The Labour Department said there were no special factors impacting last week’s claims.
Claims for the prior week were revised lower by 1,000. Economists polled by Reuters had forecast a more modest decline in claims to 274,000 last week.
The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, dropped 3,000 to 267,500.
US Treasury yields were little changed following publication of the data, and US stock futures continued their declines.
While businesses appear to have little reason to let workers go these days, in recent months they have not shown much gusto in adding new hires. U.S. employers added just 142,000 jobs to their payrolls in September and 136,000 in August, which was well below the averages in prior months of about 200,000 new jobs added every month.
The slowdown in hiring has boosted expectations the Fed will wait until early next year to raise interest rates for the first time in a decade.
Thursday’s claims report showed the number of people still receiving benefits after an initial week of aid rose by 9,000 to 2.20 million in the week ended September 26th.
Reuters
