Number of Americans Getting Unemployment Hits 45-Year Low

New applications for U.S. unemployment aid rose last week, but the number of Americans receiving benefits fell to more than a 45-year low, pointing to tightening labor market conditions.

Initial claims for state unemployment benefits increased 5,000 to a seasonally adjusted 215,000 for the week ended Oct. 20, the Labor Department said on Thursday. Data for the prior week was unrevised. Claims fell to 202,000 during the week ended Sept. 15, which was the lowest level since November 1969.

Economists polled by Reuters had forecast claims rising to 214,000 in the latest week. The Labor Department said claims for South and North Carolina continued to be affected by Hurricane Florence. Claims for Florida and Georgia were impacted by Hurricane Michael.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, was unchanged at 211,750 last week.

The labor market is viewed as being near or at full employment, with the unemployment rate close to a 49-year low of 3.7 percent. There are a record 7.14 million open jobs in the economy, suggesting a shortage of skilled workers.

That was confirmed by the Federal Reserve’s Beige Book published on Wednesday. According to the Fed, “employers throughout the country continued to report tight labor markets and difficulties finding qualified workers.”

Tightening labor market conditions and a robust economy likely will keep the U.S. central bank on course to increase interest rates again in December. The Fed raised rates in September for the third time this year and removed a reference to monetary policy remaining “accommodative” from its policy statement.

Thursday’s claims report also showed the number of people receiving benefits after an initial week of aid dropped 5,000 to 1.64 million for the week ended Oct. 13, the lowest level since August 1973. The four-week moving average of the so-called continuing claims fell 6,750 to 1.65 million, also the lowest level since August 1973.

The continuing claims data covered the week of the household survey from which the unemployment rate for October will be calculated. The four-week average of continuing claims declined 33,250 between the September and October survey periods suggesting a further improvement in the unemployment rate.