Data showed an unexpected drop in the number of Americans who applied for unemployment benefits last week, reaching a 48-year low, and signaling a rapid tightening in the labor market. The US Department of Labor said on Thursday that initial claims for unemployment benefits in the United States fell by 10,000 to 210,000 seasonally adjusted for the week ending February 24, the lowest level since December 1969.
Economists had expected claims to rise to 226,000 last week. The week was the 156th consecutive one with claims remaining below the 300,000 barrier, which is linked to a strong labor market. This is the longest stretch since 1970, when the labor market was much smaller.
Fed officials believe that the labor market will soon reach full employment. The jobless rate was at its lowest level in 17 years at 4.1%. The four-week moving average for initial claims, seen as a better gauge of labor market trends as it fluctuated week-to-week, fell by 5,000, to reach 220,500 last week, also the lowest level since December 1969.
The claims report also showed that the number of people receiving benefits after the first week of aid rose by 57,000 to 1.93 million in the week ending Feb. 17. The four-week moving average for the continuing claims fell to 1.92 million. Continuing claims data included the period during which households surveyed the unemployment rate in February. The average four-week continuous claims fell between January and February, indicating a slight change in the unemployment rate.
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