New applications for U.S. unemployment benefits dropped last week and the number of Americans on jobless rolls fell back to levels last seen in 1973, suggesting a further tightening in labor market conditions. Initial claims for state unemployment benefits decreased 5,000 to a seasonally adjusted 210,000 for the week ended Oct. 13, the Labor Department said on Thursday.
Data for the prior week was revised to show 1,000 more applications received than previously reported. Claims fell to 202,000 during the week ended Sept. 15, which was the lowest level since November 1969.
Economists polled by Reuters had forecast claims slipping to 212,000 in the latest week. The Labor Department said claims for South and North Carolina continued to be affected by Hurricane Florence, which drenched the region in mid-September. Claims for Florida were impacted by Hurricane Michael.
The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 2,000 to 211,750 last week.
The claims data covered the survey period for the nonfarm payrolls component of October’s employment report. While the four-week moving average of claims rose 5,750 between the September and October survey periods, that will probably not change expectations for a rebound in job growth this month after Florence depressed restaurant and retail payrolls in September.
The economy created 134,000 jobs in September, the fewest in a year. The labor market is viewed as being near or at full employment with the unemployment rate close to a 49-year low of 3.7 percent. There are a record 7.14 million open jobs.
Tightening labor market conditions and a robust economy likely keep the Federal Reserve on course to increase interest rates again in December. The U.S. central bank raised rates in September for the third time this year and removed the reference to monetary policy remaining “accommodative.”
Minutes of the Sept. 25-26 meeting published on Wednesday showed policymakers “generally agreed that (labor market) conditions continued to strengthen.”
Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid fell 13,000 to 1.64 million for the week ended Oct. 6, the lowest level since August 1973. The four-week moving average of the so-called continuing claims dipped 1,250 to 1.65 million, also the lowest level since August 1973.