The number of Americans filing new claims for unemployment benefits dropped to a 19-month low last week, pointing to a tightening labor market, though a shortage of workers could keep the pace of hiring moderate in October.
The weekly unemployment claims report from the Labor Department on Thursday, the most timely data on the economy’s health, also showed state unemployment rolls shrinking significantly early this month.
Initial claims for state unemployment benefits fell 6,000 to a seasonally adjusted 290,000 for the week ended Oct. 16, the lowest level since the middle of March in 2020, when the nation was in the early stage of the COVID-19 pandemic.
It was also the second straight week that claims remained below 300,000 as employers hold on to workers in the face of an acute labor shortage. Economists polled by Reuters had forecast 300,000 claims for the latest week.
Unadjusted claims, which economists say offer a better read of the labor market, tumbled 24,293 to 256,304 last week. A jump of 17,570 in filings in California was offset by notable declines in Virginia, Michigan, Pennsylvania, Texas, New York, Kentucky and the District of Columbia.
Claims have declined from a record high of 6.149 million in early April 2020. A 250,000-300,000 range for claims is seen as consistent with a healthy labor market.