The job market has been a bright spot in the US economic picture for years now, a trend further bolstered by new Labor Department data released Thursday.
Initial jobless claims, or claims filed by newly-jobless workers for unemployment benefits, are at their lowest in four decades, sinking by 6,000 to 247,000 for the week ending April 16. That’s the lowest they’ve been since November 1973. Jobless claims also touched four-decade lows the week before.
The four-week average for new claims also fell, dropping 4,000 to 260,500 claims. That number, which is considered more reliable than the week-to week volatility of the weekly total, also hovers near post-recession lows, according to the Labor Department.
Joshua Shapiro, chief US economist at MFR, Inc. explains that even though such low numbers are a probably a short-term event, they're part of a longer economic trend as wages keep firming up and businesses express more hiring confidence.
“While we do not expect claims to remain at such low levels for a sustained period of time, the fact that they are there now is likely to give comfort to those who think the labor market is in solid underlying shape,” he writes in an e-mailed analysis.
Weekly jobless claims have now held steady below 300,000 for more than a year, rather than rising like many economists had forecast. So far, the labor market’s strength has remained removed from the volatility that affected the rest of the economy during the first part of this year.
The US economy has been growing sluggishly for the past eight years, currently expanding at an annualized rate of 1.5 percent. Abroad, low fuel prices have sent shockwaves through the global economy. But at home, rock-bottom oil prices actually helped many consumers feel like they could stretch their wages farther than before, spending on dining out, tourism, and other leisure activities.
The long drop in jobless claims, along with the 215,000 jobs the economy added in March, indicate businesses are feeling more confident about keeping and hiring workers under current economic conditions. Unemployment did tick up slightly last month, from 4.9 to 5 percent, but economists say that’s a sign that more people are re-entering the workforce and searching for jobs.
Some economists were expecting jobless claims to increase due to the the ongoing labor negotiations at Verizon. Approximately 39,000 workers for the telecommunications giant walked off the job last week, and no apparent end to the conflict is in sight. But the Federal Reserve has expressed confidence that current conditions in the labor market will continue for the foreseeable future. Data from the Fed’s Beige Book, an annual survey of the 12 Federal Reserve districts, reports employment levels rising around the country, in industries like retail, service, manufacturing, and even finance.
But while the outlook may look good overall, some economists note that the growth doesn’t apply to every sector. There are still 14 job seekers for every 10 job openings available, according to an analysis from the Economic Policy Institute, a left-leaning Washington think tank. The biggest gaps fall in professional fields, healthcare and retail, food services, and construction.
It’s not yet clear if this is only a temporary or more long-term trend in the hiring data. The Bureau of Labor Statistics has projected healthcare, fast food services, and construction to be some of the fastest-growing industries over the next ten years.