WASHINGTON – The number of Americans seeking unemployment benefits last week felt to the lowest level since mid-April, another sign that workers are enjoying job security despite sluggish economic growth.
THE NUMBERS: The Labor Department said Thursday that weekly applications for jobless aid slid by 5,000 to a seasonally adjusted 249,000. The less volatile four-week average dropped 2,500 to 253,500, lowest since December 1973. Overall, 2.06 million Americans are collecting unemployment checks, down more than 7 percent from a year ago.
THE TAKEAWAY: Unemployment claims are a proxy for layoffs. Any weekly number below 300,000 suggests the labor market is healthy. Claims have come in below that level for 83 straight weeks, longest such streak since 1973 when the U.S. labor force was about half as big as it is now.
KEY DRIVERS: Workers are enjoying job security despite unimpressive economic growth. Weak business investment has hobbled the economy since late last year: Growth came in at an unimpressive 1.4 percent annual rate from April through July after growing just 0.8 percent in the first quarter and 0.9 percent in the last three months of 2015.
Still, the job market remains solid. At 4.9 percent, unemployment is close to what economists consider full employment. Employers have added 204,000 jobs a month for the past year and likely added another 175,000 last month, according to a survey of economists by the data firm FactSet in advance of Friday’s release of the September job report.
In July, advertised job postings rose by 4 percent but hiring increased by just 1 percent, suggesting that companies are struggling to fill openings with qualified workers.
“With labor increasingly scarce and expensive, employers need to hold onto their existing staff,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.