Last week, the number of Americans filing for unemployment benefits dropped more than expected to the lowest level in 45 years, but the decline is likely exaggerated as the data for several states was estimated.
The initial claims for state unemployment benefits fell 41,000 to a seasonally adjusted 220,000 for the week ending January 13, the lowest level since February 1973, according to the Labor Department on Thursday.
The Labor Department added that the claims for California, Arkansas, Kentucky, Maine, Hawaii, Virginia and Wyoming were all estimated, and that claims-taking procedures were still disrupted in the Virgin Islands and Puerto Rico following the impact of the hurricanes.
Last week was the 150th straight week that claims remained below the 300,000 threshold, which relates to a healthy labor market. This is the longest period claims have held below the threshold since 1970. The labor market is approaching full employment, with the jobless rate at a 17-year low of 4.1 percent.
Last week, the four-week moving average of initial claims dropped 6,250 to 244,500. The claims data covered the survey week for January’s nonfarm payrolls. The four-week average of claims increased 8,500 between the December and January survey periods, signifying restraint of the pace of job growth.
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Job growth is slowing down as the labor market approaches full employment, with about 5.9 million job openings throughout the nation. There has been an increase in companies stating that they are having difficulties finding qualified workers.
In its Beige Book report of anecdotal information on business activity collected from contacts throughout the nation, on Wednesday the Federal Reserve stated that “most districts cited on-going labor market tightness and challenges finding qualified workers across skills and sectors.”
Thursday’s claims report also revealed that the number of people receiving benefits after their initial week of aid increased by 76,000 to 1.95 million in the week ending January 6. The four-week moving average of the so-called continuing claims increased by 4,000 to 1.92 million.