Jobless claims drop to lowest level since 1973

The number of Americans filing for unemployment benefits dropped more than expected last week, according to figures from the Labor Department.

US initial jobless claims fell by 41,000 from the previous week's unrevised level to 220,000, hitting their lowest since 24 February 1973. Economists had been expecting a smaller decline to 250,000.

Meanwhile, the four-week moving average was down 6,250 from the previous week's unrevised average to 244,500.

The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

The Labor Department said claims taking procedures continue to be disrupted in the Virgin Islands, while the claims taking process in Puerto Rico has still not returned to normal.

Pantheon Macroeconomics said the drop in claims is a this is a correction after a run of elevated numbers, due to seasonal adjustment problems over the holidays and into the new year.

"Claims should bounce back above 230,000 next week, and then revert to the trend, just under 240,000 and likely unchanged
since before the holidays."