Claims for jobless benefits last week sank to the lowest level in nearly 50 years, signalling continued strength of the US labour market despite a slowing economy, according to data released on Thursday.
The decline came despite a spike in US government workers filing for unemployment benefits amid the longest government shutdown in history.
The sudden drop in claims also marked a recovery from increased layoffs following the back-to-back natural disasters of late 2018 and pointed to another strong month of job creation in January.
For the week ending January 19, first-time claims for unemployment insurance fell by 13,000, sinking below the 200,000 thresholds to 199,000 the lowest since November 15, 1969, the Labor Department reported.
The four-week moving average also fell by 5,500 to 215,000.
In the prior week ending January 12, claims lodged by federal civilian employees soared more than 140 per cent to hit 25,419. Claims by newly discharged veterans also bounced 40 per cent higher to 670.
Though they can see big swings from week to week, jobless claims can be used to gauge the strength of labour markets and the prevalence of layoffs.
With the US unemployment rate currently hovering nearly 50-year lows, economists say employers are reluctant to lose workers who will be difficult to replace.
As far as we can tell, the underlying trend in claims remains extremely low and probably hasn’t moved much since last summer, Ian Shepherdson of Pantheon Macroeconomics wrote in a client note.
Firms are scared to let people go unless they have no other choice because it’s so hard to recruit.