Washington (AFP) – US claims for unemployment benefits hit their lowest level in more than 48 years last week in a resounding signal of the tightness of the labor market.
While the figures can be volatile, the record lows for the labor market could add to pressure on the central bank to raise interest rates at a faster pace, although the Federal Reserve is not expected to hike when it meets next week.
For the week ending April 21, initial claims for unemployment insurance fell by 24,000 to 209,000, seasonally adjusted, the lowest since December 1969 and well below the 225,000 analysts were expecting.
The less-volatile four-week moving average fell 2,250 to 229,250 claims.
However, Michael Gapen of Barclays told AFP the weekly decline was caused almost entirely by a reversal in claims in New York.
On a seasonally adjusted basis, New York initial claims fell by almost 23,000 last week after rising 17,000 the week before.
“If we’re going to take a one-week decline as a signal of strength in the labor markets, you’d expect to see it coming from more than one state,” he said.
Nevertheless, employers around the country say they are having increasing difficulty filling open positions, making them reluctant to lay off workers who will be hard to replace.
Claims have held below 300,000 for nearly three years, the longest stretch since 1973, and have been below 250,000 for 23 consecutive weeks.
When demographic changes are taken into account, the current levels are likely the lowest ever, economists say.
Widespread reports of an intensifying labor shortages and the signs of a pickup in wages, have economists predicting inflation will gain pace in 2018.