New claims for unemployment insurance tumbled to 247,000 in the second week of April, the Labor Department reported Thursday, the lowest since November of 1973, when President Nixon was insisting that he was not a crook and the energy crisis was in full swing.
The number was even better than last week’s, which was tied for the lowest since 1973 at 253,000.
The drop defied the expectations of economists for claims to bounce back up to a still-low 265,000, according to a survey conducted by Bloomberg.
Now, jobless claims are plumbing the lowest levels in decades even as the unemployment rate has fallen to 5 percent, half what it was at the worst of the recession. It’s a sign that the jobs recovery is not petering out, and may even be gaining strength.
“Rock bottom layoffs,” wrote Brian Wesbury, chief economist at First Trust Portfolios, downgrading the odds of a recession to just 10 percent.
The jobless claims numbers, which are adjusted to smooth out seasonal variations, are collected from state unemployment offices and published weekly, providing a real-time measure of the economy’s health. Economists see low claims as a sign that there are few layoffs.
Any number of claims below 300,000 to 325,000 would yield job gains and downward pressure on the unemployment rate, economists have calculated. Claims haven’t hit 300,000 in 59 straight weeks, the longest such streak since 1973.
In 1973, however, the workforce was only roughly half what it is today. There were 91 million Americans working in November of 1973, versus over 159 million in March of this year.
Thursday’s jobless claims will raise expectations for April’s jobs report, because they cover the same week in which the household survey is conducted.
Job gains have been strong recently, averaging 209,000 over the past three months. Not even 100,000 are needed to keep the unemployment rate trending down, Federal Reserve chairman Janet Yellen has said.
