Weekly Jobless Claims Drop to Near 43-Year Low

Wall Street Reuters

FILE PHOTO: Applicants fill out forms during a job fair at the Southeast LA-Crenshaw WorkSource Center in Los Angeles November 20, 2009. REUTERS/Mario Anzuoni (Copyright Reuters 2017)

The number of Americans filing for unemployment benefits unexpectedly fell last week to near a 43-year low, amid a further tightening of the labor market that could eventually spur faster wage growth.

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Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 234,000 for the week ended Feb. 4, the Labor Department said on Thursday. That left claims just shy of the 43-year low of 233,000 touched in early November.

Claims have now remained below 300,000, a threshold associated with a strong labor market, for 101 straight weeks. That is the longest stretch since 1970, when the labor market was much smaller.

The labor market is at or close to full employment, with the unemployment rate at 4.8 percent. It hit a nine-year low of 4.6 percent in November.

Further tightening in labor market conditions could boost wage growth, which has remained stubbornly sluggish despite anecdotal evidence of more companies struggling to find qualified workers.

Lackluster wage growth, if sustained, could hurt consumer spending and crimp economic growth. Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 250,000 in the latest week.

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A Labor Department analyst said there were no special factors influencing last week's data and no states had been estimated.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 3,750 to 244,250 last week, the lowest level since November 1973.

The claims report also showed the number of people still receiving benefits after an initial week of aid increased 15,000 to 2.08 million in the week ended Jan. 28. The four-week average of the so-called continuing claims fell 3,750 to 2.08 million.

(Reporting by Lucia Mutikani; Editing by Paul Simao)