Initial jobless claims in the U.S. continued to hover around four-decade lows last week as the labor market strengthens toward full employment.
Applications submitted to state agencies for unemployment benefits decreased by 5,000 to 271,000 in the week ended Nov. 14 from 276,000 in the previous period, a Labor Department report showed Thursday. The number of claims dipped to 255,000 in mid-July, the fewest since the 1970s.
Steady demand has encouraged employers to hold the line on firings as a tighter labor market makes it difficult to attract skilled workers. Employment has shown enough signs of strength to allow Federal Reserve policy makers to consider raising rates for the first time in almost a decade.
“The labor market continues to gradually improve,” Robert Stein, deputy chief economist at First Trust Portfolios LP in Wheaton, Illinois, said before the report. There’s been “tightening in the labor market, and that should eventually lead to more rapid wage gains.”
The median forecast in a Bloomberg survey of 46 economists called for a decline to 270,000. Estimates ranged from 260,000 to 282,000. The prior week’s claims were unrevised.
There was nothing unusual in the data, and claims for Louisiana last week were estimated because the state was switching to a new system for handling applications.
The claims data cover the period that the Labor Department surveys businesses and households to calculate payrolls and the jobless rate for November.
The four-week average of claims, a less-volatile measure than the weekly figure, climbed to 270,750 from 267,750 the week before. That compares with an average of 263,250 during the comparable employment survey period for October.
The number of people continuing to receive jobless benefits fell by 2,000 to 2.18 million in the week ended Nov. 7.
In that same period, the unemployment rate among people eligible for benefits held at 1.6 percent, where it’s been since mid-September, the report showed.
As part of its dual mandate, the Fed is looking to see consistent improvement in the labor market before raising interest rates for the first time since 2006. In minutes released Wednesday, policy makers inserted language to stress that a December increase “may well become appropriate.”
The minutes broke policy makers into three camps, with some saying economic conditions necessary for tightening policy “had already been met,” while “most participants” estimated that their criteria “could well be met” in December.