New applications for unemployment aid fell last week to the lowest level since 1973 after dropping 2,000 cases from 16,000 to 214,000.
- The number of unemployment aid applications has hit a 45 year low amid a strong labor market.
- Reuters economists had forecast an even bigger drop of 3,000, and MarketWatch predicted a drop of 4,000.
- In mid September claims fell all the way to 202,000, the lowest since 1969.
The figure for the week prior was revised to add an extra 1,000 cases to the initial report. Nevertheless, the level of unemployment and unemployment aid applications continue to hit record lows with the 3.7% rate of unemployment the lowest since 1969.
For a more stable measurement of the initial claim average, many consider the four-week moving average the best performance indicator. The four-week moving average rose 1,750 to 213,750 last week.
Depending on which measurements are given more emphasis, the labor market can be said to be in its healthiest state since the 1990s or even the 1970s. While new jobless claims have dropped 2,000, existing jobless claims have dropped 7,000 to a total of 1.63 million, the lowest since 1973.
With the labor market at its healthiest in decades, the current economic expansion is set to be the longest ever by next summer after already expanding for the past 9 years. The market can now be said to be near or at full employment with 7.14 million open jobs suggesting a lack of skilled workers as opposed to a lack of available positions, and market conditions continue to push up wages after setbacks seen as a result of Hurricanes Florence and MIchael.
New employment data is due for release on Friday by the Department of Labor and should cast more light on the labor market with new jobs forecast to increase by 202,000 in total.
“The signal being flashed by claims is that further declines are likely in the jobless rate,” said chief economist Joshua Shapiro of MFR Inc.
The Institute of Supply Management said demand was moderately strong, downgrading from their verdict of “robust” in prior months. The ISM added that consumption had “softened, with production and employment continuing to expand, but at lower levels compared to September.”