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April 12, 2018 Blog 1 min read
 Jobless claims dip to 233,000, remain near lowest levels since 1970.

Chart showing jobless claims history 

“It’s a bit of a broken record (for those that recall what that means), but with initial jobless claims well below 300,000 for over three years, the persistently low level of layoffs is a very positive sign for the current strength of the labor economy. It should come as no surprise that consumer confidence remains very, very high in a jobs market like this.”

 

Initial claims for Americans applying for first-time unemployment insurance dipped to 233,000 for the week ended April 7, a result in line with expectations of 230,000 – 235,000. The four-week moving average edged modestly higher to 230,000 from a prior level of 228,250, but still close to its 40-year low mark.

 

Given the frequency of the jobless claims data, the weekly tally bounces around a bit.  Nonetheless, claims remain far below 300,000, a threshold generally associated with a healthy labor market and supportive of continued gains in payrolls.

 

This morning’s release also marks the 162nd consecutive week that jobless claims have come in below 300,000, which is the longest such streak since 1970 when the labor market was considerably smaller. When taken with the near record-low unemployment and solid trend job creation, it paints a positive picture for the labor economy – one in which employers are intent on retaining talent in an environment in which it is becoming much more difficult to find and attract qualified candidates to fill open positions.

 

The mismatch between the skills that unemployed individuals have and those that potential employers need remains evident in the growing number of job openings that are becoming harder to fill. As a result, the competition for labor is intensifying – a dynamic that will continue to tip the balance in favor of workers who can command a higher wage for their skills. As a variety of inflation measures edge higher, various gauges of compensation are also rising. 

 

With many of the key labor market indicators remaining tight versus their historical averages, jobless claims included, the jobs market appears to be on a strong footing for continued growth in the near-term. While it is not the only factor that will weigh into the Fed’s future decisions on monetary policy, it will be a significant one. 

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