U.S. jobless claims reach 44-year low
Economists say impact of hurricanes is limited
The number of people filing for unemployment benefits fell to the nation’s lowest level in more than 44 years last week, evidence of a rebound in job growth as more employees affected by Hurricanes Harvey and Irma returned to work.
Initial claims for unemployment benefits dropped by 22,000 to a seasonally adjusted 222,000 for the week ended Oct. 14 — the lowest level since March 31, 1973, when the number also was 222,000, the U.S. Department of Labor said yesterday. The less volatile four-week moving average was 248,250 jobless claims, a 9,500 decrease from the prior week and the lowest since late August.
The bigger-than-expected drop in claims — the largest since April — could have been affected by the Columbus Day holiday, which gave people one less day to file claims.
Overall, the weekly report is encouraging, said Sam Bullard, senior economist at Wells Fargo. “It would suggest that, as the Fed has stated in recent comments, there’s near-term data that medium-term momentum in the U.S. economy is not likely to be impacted as a result of the hurricanes.”
Hurricanes Harvey and Irma, which pounded Texas, Florida and the U.S. Virgin Islands, had increased jobless claims to a near threeyear high of 298,000 at the beginning of September.
“It’s taken six weeks since that peak in early September, and the claims have retraced that surge we had seen,” Bullard said. “It’s been a little quicker than we’ve seen in prior natural disasters of this magnitude.”
The jobless claims report coincides with the Bureau of Labor Statistics payroll survey.
Last week was the 137th straight week — the longest period since 1970 — that jobless claims were below 300,000, a number tied to strong labor market conditions.
The drop in claims suggests that the U.S. economy is very strong, said Michael Tyler, chief investment officer for Eastern Bank.
“Since 1973, the population has almost doubled, yet we’re seeing these low jobless claims,” Tyler said. “It’s a very strong employment picture right now.”
Record job openings, particularly for highly skilled workers, are being driven by exports, consumer demand and a catch-up period of business investment, he said.
“It’s almost what I would call a two-tier economy — and this is more true in Massachusetts than anywhere else in the country — where there are many high-skilled jobs begging for workers, and there are many low-skilled workers begging for jobs,” Tyler said.
Massachusetts’ unemployment rate fell to 3.9 percent in September — down from 4.2 percent in August and below the national rate of 4.2 percent reported by the Bureau of Labor Statistics — the state’s Executive Office of Labor and Workforce Development said yesterday. The Bay State added 9,300 jobs last month.