U.S. jobless claims at 43-year low; import prices edge up
Lowest reading since 1973 - when labor market was much smaller
WASHINGTON — The number of Americans filing for unemployment benefits held at a 43-year low last week, pointing to sustained labor market strength that could pave the way for the Federal Reserve to raise interest rates in December.
Thursday’s report from the Labor Department added to data such as September automobile sales and manufacturing and services sector surveys in reinforcing the view that economic growth picked up in the third quarter after a sluggish performance in the first half of the year. Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 246,000 for the week ended Oct. 8, the lowest reading since November 1973, the Labor Department said.
Claims for the prior week were revised to show 3,000 fewer applications received than previously reported.
It was the 84th consecutive week that claims remained below the 300,000 threshold, which is associated with robust labor market conditions. That is the longest stretch since 1970, when the labor market was much smaller.
Minutes of the Fed’s Sept. 20-21 policy meeting published on Wednesday showed several officials believed it would be appropriate to increase interest rates “relatively soon” if the economy continued to gain strength.
The U.S. central bank raised its benchmark overnight interest rate last December and has held it steady since, largely because of concerns over low inflation.
But there are signs that inflation will gradually rise toward the Fed’s 2 percent target as the dollar’s rally fades, which should ease some of the deflationary pressures from overseas.
In a second report, the Labor Department said import prices gained 0.1 percent last month after declining 0.2 percent in August. In the 12 months through September, import prices fell 1.1 percent, the smallest decrease since August 2014, after declining 2.2 percent in August.
The dollar trimmed losses against the yen after the data, while U.S. Treasuries pared gains. Economists had forecast first-time applications for jobless benefits rising to 254,000 in the latest week.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 3,500 to 249,250 last week, also the lowest level since November 1973.
While the pace of employment growth has slowed to a monthly average of 178,000 jobs so far this year after averaging 229,000 positions per month in 2015, it remains well above the roughly 100,000 that Fed Chair Janet Yellen says is needed to absorb new entrants in the job market.
Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid declined 16,000 to 2.05 million in the week ended Oct. 1, the lowest level since June 2000.
The four-week average of the so-called continuing claims dropped 25,750 to 2.07 million. That was the lowest reading since July 2000.
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)