Jobless claims on low
24 February, 2018, 12:00 am
WASHINGTON – The number of Americans filing for unemployment benefits fell to a near 45-year low last week, pointing to strong job growth in February and solid momentum in the economy.
The economy’s brightening prospects were also underscored by other data on Thursday showing a gauge of future economic activity increasing for a fourth straight month in January. Labour market strength should continue to underpin consumer spending, despite a drop in retail sales in January.
“Firms are extraordinarily unwilling to part company with workers reflecting, in all likelihood, the difficulty of replacing them,” said John Ryding, chief economist at RDQ Economics in New York.
Initial claims for state unemployment benefits dropped 7000 to a seasonally adjusted 222,000 for the week ended February 17, the Labor Department said on Thursday. Claims fell to 216,000 in mid-January, which was the lowest level since January 1973.
Claims for six states, including California, were estimated because of Monday’s Presidents Day holiday. While that probably distorted last week’s data, the underlying trend in claims was consistent with a robust labour market.
Economists polled by Reuters had forecast claims unchanged at 230,000 in the latest week. It was the 155th straight week that claims remained below the 300,000 threshold, which is associated with a strong labour market. That is the longest such stretch since 1970, when the labour market was much smaller.
The labour market is near full employment, with the jobless rate at a 17-year low of 4.1 per cent. Tightening labor market conditions are starting to push up wage growth, which could help to lift inflation toward the Federal Reserve 2 per cent target.
Minutes of the US central bank’s January 30-31 policy meeting published on Wednesday showed policymakers upbeat in their assessment of the economy and a number “judged that the continued tightening in labor markets was likely to translate into faster wage increases at some point.”
The minutes also noted that “several others suggested that the upside risks to the near-term outlook for economic activity may have increased.”
The dollar was trading lower against a basket of currencies. Prices for US Treasuries rose, with the yield on the benchmark 10-year note retreating from a more than four-year high. Stocks on Wall Street rose after two days of losses.