New claims for unemployment benefits dropped to 222,000 in the second week of October, the Department of Labor reported Thursday, the lowest level in 44 years, as the economy continued to shake off the damage caused by hurricanes that struck the Southeast.
Forecasters had expected new jobless claims to decline from the surprising low 243,000 the week before to around 240,000.
Low jobless claims are a good sign. They suggest that layoffs are infrequent and accordingly that net job growth is strong. Because the claims numbers are aggregated from state unemployment agencies weekly, they are valued by investors and government official as a high-frequency gauge of the economy’s health.
The total number of people receiving benefits, which are available for up to 26 weeks in most states, fell by 16,000 to 1.89 million, also lowest level in 44 years.
Thursday’s numbers are impressive given the much larger size of the labor force today compared to 1973. In March of that year, with Nixon as president, the workforce stood at just under 89 million. Today, it’s 161 million.
With today’s labor force, economists reckon that new claims below the 300,000 indicate that unemployment will stay steady or fall. At 4.2 percent in September, unemployment is already as low as it has been since the last days of the dotcom bubble.
After Florida and Texas were rocked by Hurricanes Harvey and Jose, claims crept up to the 300,000 mark but didn’t hit it. Although new claims remain elevated in those states, overall they’ve plummeted unexpectedly low.
Agencies are still having trouble counting unemployment benefit applications in Puerto Rico and the Virgin Islands, the Labor Department said, because of the disruptions from Hurricanes Irma and Maria.
