By Meletus EZE
The number of Americans filing applications for jobless benefits tumbled to near a 49-year low last week. the Labour Department said on Thursday.
Reports said this could ease concerns about a slowdown in the labour market and economy.
Initial claims for state unemployment benefits dropped 27,000 to a seasonally adjusted 206,000 for the week ended Dec. 8, the Department said .
Last week’s decline in claims was the largest since April 2015. Claims hit 202,000 in mid-September, which was the lowest level since December 1969.
Data for the prior week was revised to show 2,000 more applications received than previously reported.
Economists polled by Reuters had forecast claims falling to 225,000 in the latest week. Claims shot up to an eight-month high of 235,000 during the week ended Nov. 24.
The Labor Department said only claims for Virginia were estimated last week.
The four-week moving average of initial claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 3,750 to 224,750 last week.
While difficulties adjusting the data around holidays likely boosted applications in prior weeks, there were concerns the labour market was losing some momentum given financial market volatility, the fading stimulus from a $1.5 trillion tax cut and the Trump administration’s protectionist trade policy.
Last week’s sharp drop in claims also suggests a slowdown in job growth in November was likely the result of worker shortages.
Non-farm payrolls increased by 155,000 jobs after surging by 237,000 in October.
With the unemployment rate near a 49-year low of 3.7 percent, Federal Reserve officials view the labour market as being at or beyond full employment.
The U.S. central bank is expected to raise interest rates at its Dec. 18-19 policy meeting.
The Fed has hiked rates three times this year. Most economists expect the central bank will increase borrowing costs twice next year, although traders expect no more than one rate increase.
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Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid increased 25,000 to 1.67 million for the week ended Dec. 1.
The four-week moving average of the so-called continuing claims slipped 2,500 to 1.67 million.
