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Unemployment claims drop to more than 45-year low

Labor market considered to be near or at 'full employment'

Job seekers line up at TechFair in Los Angeles, California, U.S. March 8, 2018. REUTERS/Monica Almeida
Job seekers line up at TechFair in Los Angeles, California, U.S. March 8, 2018. REUTERS/Monica Almeida

WASHINGTON — The number of Americans filing for unemployment benefits fell to more than a 45-year low last week, suggesting the economy remains strong despite signs of a slowdown in the first quarter.

Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 215,000 for the week ended March 24, the lowest level since January 1973, the Labor Department said on Thursday. Data for the prior week were revised to show 2,000 fewer claims received than previously reported.

Economists polled by Reuters had forecast claims falling to 230,000 in the latest week. The government released 2018 seasonal factors with the report and published revisions to the seasonal factors and data going back to 2013.

The revisions did not change the theme of tightening labor market conditions. Claims have now been below the 300,000 threshold, which is associated with a strong labor market, for 158 straight weeks. That is the longest such stretch since 1970, when the labor market was much smaller.

The labor market is considered to be near or at full employment. The jobless rate is at a 17-year low of 4.1 percent, not too far from the Federal Reserve’s forecast of 3.8 percent by the end of this year.

The Labor Department said claims for Maine, Hawaii and Colorado were estimated last week. It also said claims-taking procedures in Puerto Rico and the Virgin Islands had still not returned to normal after the territories were devastated by Hurricanes Irma and Maria last year.

The four-week moving average of initial claims, viewed as a better measure of labor market trends as it irons out week-to-week volatility, slipped 500 to 224,500 last week.

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Economists are optimistic that tightening labor market conditions will start boosting wage growth in the second half of this year. That should help to support consumer spending, which slowed at the start of the year.

The claims report also showed the number of people receiving benefits after an initial week of aid increased 35,000 to 1.87 million in the week ended March 17. The four-week moving average of the so-called continuing claims fell 12,750 to 1.86 million.

The continuing claims data covered the week of the household survey from which March’s unemployment rate will be calculated. The four-week average of continuing claims declined 46,000 between the February and March survey periods, suggesting little change in the jobless rate this month.

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