The number of Americans filing unemployment claims has fallen just short of a 43-year low, amid a further tightening of the labor market that could eventually spark faster wage growth.
The Labor Department reported that initial claims for state unemployment benefits fell by 12,000 to a seasonally adjusted 234,000 for the week ending Feb. 4, resulting in the near 43-year low of 233,000 claims logged in early November.
Claims have now held below 300,000, a threshold associated with a strong labor market, for 101 straight weeks. That represents the longest stretch since 1970, when the labor market was much smaller.
“There is no sign of a pickup in layoff activity. We continue to view the signal of extremely subdued layoffs from the jobless claims data as evidence of companies attempting to retain their workers in a tight labor market,” said John Ryding, chief economist at RDQ Economics in New York.
The unemployment rate sits at 4.8 percent after hitting a nine-year-plus low of 4.6 percent in November, signaling that the labor market is at or close to full employment. The economy created 227,000 jobs in January.
Should labor market conditions tighten further, wage growth could be boosted—an indicator that has remained stubbornly sluggish despite word that more companies are struggling to find qualified workers.
“Today’s report sent a pretty upbeat signal about conditions in the job market,” said Daniel Silver, an economist at JPMorgan in New York. “It looks like conditions in the job market have remained solid in the few weeks since the reference period for the January payroll report.”
The four-week moving average of claims, considered a stronger measure of labor market trends as it smooths out week-to-week volatility, fell 3,750 to 244,250 last week, the lowest level since November 1973.
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