Fewer Americans requested unemployment benefits in the week ending March 17 than economists expected. Based on Labor Department data, 221,000 filed jobless claims that week, which is 9,000 fewer than the week before (pdf).
Economists polled by Reuters had forecast claims decrease to 225,000 for the week.
The 12-month average for jobless claims dropped below 220,000 again—the lowest level since 1970.
U.S. financial markets were moved little by the jobless claims data as investors continued to digest the policy statement and macroeconomic projections released by the Fed on March 20.
Spooky Job Growth
Some economists have rendered their predictions gloomy with the unexpectedly low job growth in February, when only 20,000 were added, in contrast to the strong monthly average of 235,000 additional jobs between January 2019 and 2018, based on Bureau of Labor Statistics (BLS) data.
The ADP human resources company estimated private job growth of 183,000 in February, based on payroll data drawn from its more than 400,000 clients. Its numbers rarely differ from the BLS this much.
ADP spokeswoman Allyce Hackmann contested the accuracy of the BLS estimate.
“Job growth is weakening, but the [BLS] February employment number overstates the case,” she said in an email.
BLS has rarely reported a figure so low, and if so, it was usually a one-month fluke.
The unemployment rate in February was 3.8 percent with a one-year average below 3.9 percent, which is the lowest since April 1970.
Hispanic unemployment, in particular, has broken one record low after another, dropping to 4.3 percent in February.
Some economists view unemployment below 4 percent as full employment. The Trump administration, however, believes there’s still room for more employment as people who had given up on getting a job are encouraged to join the workforce again.
The standard unemployment rate excludes people who haven’t looked for a job in the past four weeks. Among those considered out of the labor force, there are more than 5 million who want a job, the BLS data shows.
And they seem to have been coming from the sidelines. Indeed, 70 percent of new hires in 2018 were from the outside of the labor force, Labor Secretary Alex Acosta said March 4.
The administration has focused on apprenticeships and training programs to help the unemployed bridge the skill gap between them and the 7.6 million job openings in the economy. The Labor Department has launched a website, Apprenticeship.gov, that allows Americans to search for apprenticeship opportunities by location.
Economy at Large
The growth of the U.S. economy has accelerated during the past two years, spurred by the election of President Donald Trump, who delivered on several points of his pro-business policy, including cutting taxes and regulations and renegotiating a new trade deal with Canada and Mexico.
Productivity grew 1.3 percent in 2018—the strongest rate since 2010. Wages grew by 3.5 percent in 2018, based on average weekly earnings in private nonfarm jobs.
The gross domestic product (GDP) grew at a rate of 2.6 percent during the October–December period, after a robust 3.4 percent growth pace in the third quarter. The fourth to fourth quarter GDP increased by 3.1 percent, the best since 2005.
Reuters contributed to this report.