Applications for U.S. unemployment benefits fell last week to the lowest level in more than five decades, underscoring the continued strength of the labor market despite recent corporate layoff announcements.
Initial claims for state unemployment benefits declined by 26,000 to 189,000 in the week ended April 25, the Labor Department said Thursday. Economists had expected claims to come in at 212,000.
The latest reading is historically rare. In weekly data going back to 1967, initial claims have been lower than 189,000 only 24 times out of 3,095 observations, or 0.78 percent of the time. Claims have not been lower than the current level since Sept. 6, 1969, when they stood at 182,000.
Including weeks when claims were exactly equal to the latest reading, claims have been at or below this level only 29 times out of the more than 3,000 weeks, or 0.94 percent of the series.
The four-week moving average, which smooths out week-to-week volatility, fell to 207,500, also indicating that layoffs remain unusually low by historical standards. This measure has only been lower around four percent of the time.
Continuing claims, a proxy for the number of people receiving unemployment benefits, fell to 1.79 million in the prior week, the lowest level in two years. This puts the leve of continued claims in the best 14 percent since 1967.
The data suggest that the labor market remains in a severely low-layoff environment. Several large companies have announced job cuts this year, but those announcements have not translated into a broad rise in unemployment claims.
President Trump’s border enforcement and immigration policies have significantly reduced competition U.S. workers face from newly arrived foreigners, transforming business employment strategies to retaining workers rather than turning to an ever-expanding pool of labor. Job security has almost never been this strong in modern American history.
Before seasonal adjustment, initial claims also declined last week. A separate report Thursday showed the U.S. economy grew at a 2 percent annual rate in the first quarter, supported by solid consumer and business demand.
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