The monthly average for new claims for unemployment benefits fell to a new 44-year low just as President Trump took office, the Department of Labor reported Thursday.
The four-week average for claims fell by 2,000 to 245,500, beating the previous week’s mark to reach the lowest level since November of 1973.
The drop in the monthly average came even though claims rebounded slightly in the week ending just after Trump was sworn in. Claims, which are adjusted for seasonal variations, totaled 259,000 in the week ending the 21st, up from an ultra-low 237,000. Investors had expected such an increase.
Low claims are viewed as a good sign for the jobs market, as they indicate that few people are getting laid off and showing up at state unemployment agencies to collect benefits.
Thursday’s report is another indication that Trump inherited an improving labor market.
The jobless claims numbers may overstate just how strong the jobs market is. The recent decades-low claims may reflect an issue with the seasonal adjustment used by the Department of Labor, Goldman Sachs economists wrote in a note Thursday. Furthermore, claims may be low because of relatively weak temporary holiday hiring that resulted in fewer layoffs after the holidays ended.
Nevertheless, the overall picture is bright.
Claims are nowhere near the 300,000 mark that economists reckon would indicate a rising unemployment rate.
And at 4.7 percent in December, the unemployment rate is not far from where Federal Reserve officials think it would be if the economy were fully healthy, although broader measures of underemployment are still elevated.
