Americans filing for unemployment benefits were way fewer than expected last week, the number hitting its lowest level since October, pointing to sustained strength in the labour market that should further dispel fears of a recession.
The U.S. Labor Department said initial claims for state unemployment benefits declined 18,000 to a seasonally-adjusted 259,000 for the week ended March 5, the lowest reading since mid-October. The prior week's claims were revised to show 1,000 fewer applications received than previously reported.
Claims are being watched for any sign of labour market weakness following a recent massive stock market sell-off that caused financial market conditions to tighten amid fears the economy was heading into recession.
So far, the American labour market remains on strong footing, with non-farm payrolls increasing by 242,000 jobs in February and the unemployment rate holding at an eight-year low of 4.9%
A tightening labour market and firming inflation could see the Federal Reserve gradually raising interest rates this year. The U.S. central bank hiked its benchmark overnight interest rate in December for the first time in nearly a decade.
Economists had forecast claims slipping to 275,000 in the latest week. A department analyst said there were no special factors influencing last week's claims data and no states had been estimated.
Claims have now been below the 300,000 threshold, which is associated with healthy labour market conditions, for a year - the longest run since the early 1970s. Last week's drop saw claims breaking outside their recent 262,000-294,000 range.
The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 2,500 to 267,500 last week, the lowest level since late October.
Related Stories
