In a new report from the U.S. Labor Department, the initial U.S. jobless claims fell by 9,000 to 221,000 in seven days ending on Feb. 3. The economists surveyed by MarketWatch forecast a 235,000 reading, which would be the lowest the jobless number has been since 1973.
The more stable monthly average of claims declined by 10,000 to 224,500, the government said Thursday. That’s the lowest level since March 1973, reports MarketWatch.
MarketWatch says that some of the reasoning behind this big drop in numbers is probably due to Missouri, California, and New York seeing big declines in unadjusted jobless claims, but in most states, there was little change.
U.S. jobless claims have now been under the key 300,000 threshold that signals a vibrant labor market for 153 straight weeks. And there is no evidence at all that claims are about to head higher.
The overall picture of the economy is that the U.S. economy added a healthy 200,000 new jobs in January and the unemployment remained at a 17-year low of 4.1 percent reflecting the best labor market in almost two decades.
The recent GOP tax reform is unmistakably a part of the reason for such a development in the economy and the recent boom of job offerings. When there are more jobs, more people are employed, and there is more money circulating in the economy.
Even better, the long-awaited uptick in worker wages might be in the offing. The yearly increase in hourly pay rose to a nine-year high of 2.9%, though it may have been exaggerated by temporary factors.
Still, a number of wage trackers suggest worker pay is creeping higher because a tight labor market that is forcing companies to compete harder for employees, which can also be in reaction to the corporation tax cuts from Trump’s tax plan.
“In short, claims remain historically low, consistent with the trend in employment growth remaining more than strong enough to keep the unemployment rate trending down,” said Jim O’Sullivan, chief U.S. economist at High-Frequency Economics.