First-time claims for unemployment benefits fell to a nearly 45-year low last week as the labor market shows further signs of tightening this year.
Claims plummeted to 220,000, a decrease of 41,000 from the previous week’s 261,000, the lowest level since Feb. 24, 1973, the Labor Department reported on Thursday.
The latest figures, which were likely lower because of holiday hiring and winter weather, show that employers are holding on to their workers as the pool of skilled people shrinks.
{mosads}The Federal Reserve’s Beige Book released Wednesday said that most areas “cited on-going labor market tightness and challenges finding qualified workers across skills and sectors, which, in some instances, was described as constraining growth.”
Several regions reported greater demand for manufacturing and construction labor, the report said.
A tighter labor market is expected to boost wages in the months ahead.
The jobless rate is 4.1 percent, the lowest level in 17 years, and economists are forecasting a drop into the mid-3 percent range during the year.
Jobless claims remained below 300,000 for the 150th straight week, the best streak since 1970.
The four-week moving average, a better gauge of the labor market’s growth, was 244,500, a decrease of 6,250 from the previous week’s average of 250,750, the report showed.
Estimates for claims were made in California, Arkansas, Kentucky, Maine, Hawaii, Virginia and Wyoming.
Claims procedures in the Virgin Islands and Puerto Rico still have not returned to normal after hurricanes battered area last year.