The number of Americans filing for unemployment benefits fell to near a 44-year-low last week, pointing to further tightening of the labor market even as economic growth appears to have remained moderate in the first quarter.
The stronger labor market combined with rising inflation could push the Federal Reserve to raise interest rates this month.
Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 223,000 for the week ended Feb. 25, the lowest level since March 1973, the Labor Department said on Thursday. Data for the prior week was revised to show 2,000 fewer applications received than previously reported.
It was the 104th straight week that claims remained below 300,000, a threshold associated with a healthy labor market. That is the longest stretch since 1970, when the labor market was much smaller. It is now at or close to full employment, with an unemployment rate of 4.8 percent.
Economists polled by Reuters had forecast new claims for unemployment benefits dipping to 243,000 in the latest week. Financial markets are already pricing in a rate hike at the Fed’s March 14-15 policy meeting.
U.S. stock index futures rose after the data on Thursday. The U.S. dollar .DXY also firmed against a basket of currencies, while prices for U.S. government debt fell.
A survey from the U.S. central bank on Wednesday showed the labor market remained tight in early 2017, with some of the Fed’s districts reporting “widening” labor shortages.
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