The US economy had some encouraging news last week as the number of people filing for unemployment claims fell to a near 43-year low. The improvement came as the labour market continues to tighten, with hopes that it would soon yield an increase in wage growth. The Labour department revealed on Thursday that state unemployment benefits claims were down by 12,000 for the week ending February 4th, for a seasonally adjusted 234,000. This is close to the 43 year low of 233,000 from November 1973. It has now been 101 weeks of job claims being below 300,000, which is a measure used to gauge the strength of the market. This is the longest it has been since 1970.
The US economy is now enjoying a period of near fully employment, with the unemployment rate standing at 4.8 percent, though a step back from the nine-year-low of 4.6 percent it was in November. 227,000 jobs were created in January, but wage growth is yet to reflect the desired increase. As it stands, consumer spending will be stifled until wages improve, even as companies report a lack of qualified staff. Last week’s figures were considerably better than some expected. Economists polled by Reuters predicted first-time applications for unemployment claims would hit 250,000 for the week. The results for the four-week moving average, which gives a better understanding of the labour market trend, stood at 244,250 for the past week, which was a drop of 3,750, making it the lowest level since November 1973. At the end of January (week ending 28th), the total number of claims was 2.08 million people. The four-week average was at the same level, after a decline of 3,750.