Just 187,000 people in the United States filed for initial weekly unemployment benefits last week, lower than economists’ expectations of 210,000, according to data released Thursday by the Department of Labor.
The last time the weekly number was that low was September 6, 1969, shortly after Neil Armstrong stepped foot on the moon and hippies were rocking out to Jimi Hendrix at Woodstock. Back then, 182,000 people filed for jobless benefits.
The latest jobless claims total was also down from an upwardly revised 215,000 in the previous week. The labor market remains a bright spot in the US economy, even as consumers are feeling the pinch of higher oil and gas prices and other inflation pressures.
In another encouraging sign, the number of people filing for continued jobless claims fell 67,000 to 1.35 million during the week ending March 12. That’s the lowest level for this reading since January 3, 1970.
However, the strong jobs numbers could lead the Federal Reserve to step up its pace of interest rate hikes in order to keep inflation in check.
The Fed raised rates earlier this month for the first time since December 2018, by a quarter of a percentage point. Traders are now pricing in a nearly 70% likelihood of a half-point rate hike at the Fed’s next meeting on May 3-4.
“There isn’t much more to say about the labor market. It is extremely strong and this data is exactly the sort of evidence that has given the Fed confidence that they can raise rates more quickly to battle inflation,” said Jefferies economists Thomas Simons and Aneta Markowska in a report.
“Demand for labor is strong and there are no reasons to believe that this will change any time soon, barring another wave of a new Covid variant,” the Jefferies economists added.
The government will report its closely watched monthly jobs figures for March next Friday. If the latest jobless claims numbers are any indication, the unemployment rate could fall and jobs gains should be solid. Wage growth may remain robust too.
“It’s an excellent time to be looking for work, since the labor market is tight, wages are rising and workers have negotiating power in many industries,” said Bankrate.com senior industry analyst Ted Rossman in a report after the latest claims numbers were released.