The number of Americans filing initial claims for unemployment benefits tumbled sharply last week.
Jobless claims fell 8,000 to a seasonally adjusted 211,000 for the week ended November 2. Economists had expected a smaller drop to 215,000.
The prior week was revised up by 1,000 to 219,000.
Weekly claims can be volatile so economists tend to look at the four-week moving average as a better gauge of the health of the labor market. This edged marginally higher to 215,250.
Because jobless claims are a proxy for layoffs, they have been closely watched for signs that economic conditions–including tariffs, the UAW General Motors strike, or the contraction in the manufacturing sector–are costing jobs for American workers. The low levels of claims, as well as very low unemployment, indicates that U.S. businesses are reluctant to let workers go despite some strains.
Jobless claims can also weigh on consumer spending, causing consumers to pull back when they rise. The low and falling level of jobless claims is likely to support consumer spending, a crucial element of economic growth.