US jobless claims fall to near 43-year low

WASHINGTON: New US claims for jobless benefits continued to fall at the start of February, hitting its lowest level in three months, amid a further tightening of the labor market that could eventually spur faster wage growth.
The number of Americans filing for unemployment benefits unexpectedly fell last week to near a 43-year low, the Labor Department reported Thursday.
Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 234,000 for the week ended Feb. 4, the department said. That left claims just shy of the 43-year low of 233,000 touched in early November.
Claims have now remained below 300,000, a threshold associated with a strong labor market, for 101 straight weeks. That is the longest stretch since 1970, when the labor market was much smaller.
The result confirmed the improving health of the US labor market and followed resurgent job creation in January.
The less volatile four-week moving average hit its lowest point since Nov. 3, 1973, falling 3,750 to 244,250.
New claims for jobless benefits can be used to gauge the prevalence of layoffs in the US economy and the overall health of labor markets.
The labor market is at or close to full employment, with the unemployment rate at 4.8 percent. It hit a more than nine-year low of 4.6 percent in November. The economy created 227,000 jobs in January.
Analysts say the low level of layoffs suggest employers face difficulty filling new positions and fear being unable to replace the people they let go. That makes them more willing to ride out periods of low demand without resorting to layoffs.
The health of the labor market is a key factor for the US central bank which last month left interest rates unchanged. The Federal Reserve raised they benchmark interest rate in December for the first time in a year, a move prompted by robust job creation and the belief that the economy was at or nearing full employment.
Prices of US Treasuries extended losses after the data. US stock index futures were trading slightly higher as was the dollar against a basket of currencies.
Further tightening in labor market conditions could boost wage growth, which has remained stubbornly sluggish despite anecdotal evidence of more companies struggling to find qualified workers.
Lackluster wage growth, if sustained, could hurt consumer spending and crimp economic growth. Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 250,000 in the latest week.
A Labor Department analyst said there were no special factors influencing last week’s data and no states had been estimated.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 3,750 to 244,250 last week, the lowest level since November 1973.
The claims report also showed the number of people still receiving benefits after an initial week of aid increased 15,000 to 2.08 million in the week ended Jan. 28. The four-week average of the so-called continuing claims fell 3,750 to 2.08 million.