US unemployment falls 44-year low

The number of Americans filing for unemployment benefits fell to near a 44-year-low last week, pointing to further tightening in the labour market even as economic growth appears to have remained moderate in the first quarter, reports CNBC.

Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 223,000 for the week ended Feb. 25, the lowest level since March 1973, the labour Department said on Thursday. Data for the prior week was revised to show 2,000 fewer applications received than previously reported.
It was the 104th straight week that claims remained below 300,000, a threshold associated with a healthy labour market.
That is the longest stretch since 1970, when the labour market was much smaller. The labour market is at or close to full employment, with the unemployment rate at 4.8 per cent.
labour market tightness, combined with rising inflation, could encourage the Federal Reserve to raise interest rates at its March 14-15 policy meeting.
A survey from the US central bank on Wednesday showed the labour market remained tight in early 2017, with some of the Fed’s districts reporting “widening” labour shortages.
Economists polled by Reuters had forecast new claims for unemployment benefits dipping to 243,000 in the latest week.
A labour Department analyst said there were no special factors influencing last week’s claims data. Only claims for Oklahoma were estimated.
The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 6,250 to 234,250 last week, the lowest reading since April 1973.
Data this week showed tepid growth in consumer spending in January, weak equipment and construction spending and a wider goods trade deficit, suggesting the economy struggled to gain momentum early in the first quarter after slowing in the final three months of 2016.
Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid increased 3,000 to 2.07 million in the week ended Feb. 18. The four-week average of the so-called continuing claims edged up 750 to 2.07 million.
The continuing claims data covered the survey week for February’s unemployment rate. The four-week moving average of claims fell 21,500 between the January and February survey periods, suggesting an improvement in the jobless rate. thefinancialexpress