The number of Americans filing for unemployment benefits fell more than expected last week, pointing to tightening labor market conditions that should support the economy this year.
Initial claims for state unemployment benefits declined 14,000 to a seasonally adjusted 246,000 for the week ended Jan. 28, the Labor Department said on Thursday.
Data for the prior week were revised to show 1,000 more applications received than previously reported. Claims have now been below 300,000, a threshold associated with a healthy labor market, for 100 straight weeks. That is the longest stretch since 1970, when the labor market was much smaller.
The labor market is at or close to full employment, and the Federal Reserve said on Wednesday it expected labor market conditions would strengthen “somewhat further.”
The Fed, which has forecast three interest rate increases this year, kept its benchmark overnight lending rate unchanged in a range of 0.50 percent to 0.75 percent at the end of its latest two-day policy meeting. The U.S. central bank increased borrowing costs in December.
Economists polled by Reuters had forecast first-time applications for jobless benefits falling to 250,000 in the latest week. A Labor Department analyst said there were no special factors influencing last week’s data and no states had been estimated.
Claims have been choppy since November because of difficulties stripping seasonal fluctuations from the data around holidays. The volatility is expected to get washed out of the data in the coming weeks.
Through this period of volatility, the trend in claims has remained strong. The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 2,250 to 248,000 last week.
Last week’s claims data have no bearing on January’s employment report, due to be released on Friday, as they fall outside the survey period. According to a Reuters survey of economists, nonfarm payrolls probably increased by 175,000 jobs last month, picking up from the 156,000 jobs added in December.
There is, however, a possibility that employment gains could beat expectations after reports on Wednesday showed jumps in private sector hiring and manufacturing jobs in January.
The unemployment rate is expected to be unchanged at 4.7 percent in January, near a nine-year low. Tightening labor market conditions are expected to boost wage growth and support the economy through strong consumer spending and a continued housing market recovery.
Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid fell 39,000 to 2.06 million in the week ended Jan. 21.
The four-week average of the so-called continuing claims dropped 13,000 to 2.08 million.
(Reporting by Lucia Mutikani; Editing by Paul Simao)