WASHINGTON, May 12 (Reuters) – The number of Americans filing new claims for unemployment benefits fell to a 52-year low last week, the latest sign of a strengthening labor market and robust economy..
Initial claims for state unemployment benefits dropped 44,000 to a seasonally adjusted 184,000 for the week ended May 7, the lowest level since September 1969, the Labor Department said on Thursday. Data for the prior week was revised to show 6,000 more applications received than previously reported..
Economists polled by Reuters had forecast 205,000 claims for the latest week. Claims have now declined for 10 straight weeks..
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 1,500 to 203,750 last week..
The claims data has no bearing on the Labor Department’s closely watched employment report for May, which will be released on Friday..
According to a Reuters survey of economists, nonfarm payrolls likely increased by 391,000 jobs last month, with the unemployment rate holding steady at 3.6%..
A separate report from the Labor Department on Thursday showed the number of Americans continuing to claim unemployment benefits after an initial week of aid dropped 18,000 to 1.34 million during the week ended April 30. The continuing claims data covered the week that the Labor Department surveyed employers for the nonfarm payrolls component of its employment report..
The four-week moving average of continuing claims fell 38,000 to 1.38 million..
The claims data suggested that the labor market remains very tight, and businesses are struggling to find workers. The quits rate, or the number of people voluntarily leaving their jobs, rose to 2.9% in March, the highest level since December 2021..
The number of job openings dropped to 11.5 million on the last day of March, down from a record 11.9 million in December. There were 1.9 job openings for every unemployed person in March..
The Federal Reserve has raised interest rates three times this year in an effort to cool demand and tame inflation, which is at a 40-year high. The U.S. central bank is expected to raise rates by another 50 basis points at its next meeting in June and follow up with similar increases at its remaining six meetings this year..
Higher interest rates are expected to slow economic growth and lead to some job losses. But economists do not expect a recession, as the labor market remains strong and consumers are still spending..
The unemployment rate is expected to rise slightly as the Fed tightens monetary policy, but it is likely to remain low by historical standards..
The Fed’s aggressive policy tightening is also raising the risk of a recession in 2023, but economists believe the central bank can engineer a soft landing for the economy by raising rates gradually and communicating its intentions clearly..
