US initial jobless claims drop to lowest level in 49 years

The number of Americans filing for unemployment benefits hit its lowest level in 49 years last week, according to data from the Labor Department.

US initial jobless claims declined by 10,000 to 210,000 from the previous week’s level, which was revised down by 2,000. Economists had been expecting claims of 226,000.

This marked the lowest level of claims since 6 December 1969, when it was 202,000.

Meanwhile, the four-week moving average fell by 5,000 to 220,500 from the previous week’s average, which was revised down by 500. This marked the lowest level for the average since 27 December 1969, when it was 219,750.

The Labor Department said claims taking procedures in Puerto Rico and in the Virgin Islands have still not returned to normal.

Pantheon Macroeconomics said: "Population-adjusted, claims are at an all-time low, probably due in part to friendly seasonals, but the trend clearly is falling. This is consistent with the idea that labor is so scarce that firms have raised the bar for letting people go. Claims are not a reliable indicator of payroll growth at this stage in the cycle - we are more interested in the hiring surveys - but the overall message from all the labor data is that job gains are likely to remain very strong.

"That means the unemployment rate, which is already below the Fed's Nairu estimate, will keep falling, unless the participation rate rises. We see no sign of that, yet."