US jobless claims drop to lowest level since 1973

WASHINGTON – Just 223,000 Americans applied for unemployment benefits last week, fewest in nearly 44 years.

THE NUMBERS: The Labor Department says unemployment claims dropped by 19,000 from 242,000 the previous week to the lowest level since March 1973 when Richard Nixon was president. The four-week average, which is less volatile, fell by 6,250 to 234,250, lowest since April 1973.

Overall, 2.07 million Americans are collecting unemployment benefits, down more than 7 per cent from a year ago.

THE TAKEAWAY: Unemployment claims are a proxy for layoffs. They have come in below 300,000 a week for two straight years, the longest such streak since 1970. The low level of claims suggests that employers are confident enough in the economy to be holding on to staff. “Businesses are finding it ever-harder to recruit, so the bar for letting people go has risen,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a research note.

KEY DRIVERS: The U.S. job market is solid. Employers added a healthy 227,000 jobs in January. The unemployment rate is 4.8 per cent, close to what economists consider full employment.

The Labor Department will release the February jobs report next week. Economists surveyed by the data firm FactSet forecast that the economy generated 175,000 jobs in February and that the unemployment rate slipped to 4.7 per cent.