In a sign that the labor market is continuing to tighten, the number of Americans making initial claims for state unemployment benefits last week fell just shy of the lowest level in decades.
The Labor Department said initial jobless claims, a proxy for layoffs, dropped by 12,000 to a seasonally adjusted 234,000 for the week ended Feb. 4 . Economists had forecast first-time applications for jobless benefits rising to 250,000 from 246,000 in the prior week.
Jobless applications have now stayed below the 300,000 threshold normally associated with a strong jobs market for 101 straight weeks, the longest period 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,” John Ryding, chief economist at RDQ Economics in New York, told Reuters.
The four-week moving average of claims, which irons out week-to-week volatility, fell 3,750 to 2.08 million last week. The report also showed the number of people still receiving benefits after an initial week of aid increased by 15,000 to 2.08 million.
According to Reuters, further tightening in the labor market “could boost wage growth, which has remained stubbornly sluggish despite anecdotal evidence of more companies 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.”
In January, employers added 227,000 jobs, while the unemployment rate rose slightly to 4.8% after hitting a more than nine-year low of 4.6% in November.