By Juliette Rocheleau
The U.S. initial jobless claims for the week ended January 13 plunged to 220,000, its lowest number in almost 45 years, the U.S. Department of Labor reported Thursday, pointing to a robust labor market.
Due to high volatility in reporting from week to week, the more stable four-week moving average is used to gauge trends. That average decreased by 6,250 to 244,500, seen as a further indication of a healthy economy.
Source: U.S. Department of Labor
The unemployment rate stayed steady at previously reported 4.1 percent. The low number of jobless claims could lead to an increased number of people reentering the job search market, said DePaul University Professor of Economics Brian Phelan.
“[It] could cause the unemployment rate to go up slightly if it induces some individuals to start looking for jobs again,” said Phelan, “but even if the unemployment rate did go up in response to that, that would largely be seen as signs of a strong labor market.”
Economists had forecast claims dropping to 250,000, but Ball State University economist Michael Hicks said he wasn’t surprised by the sharper drop.
“We’re now seeing one or two percent growth in the share of workers that are employed with only a high school degree, and that signals less skilled workers are now moving into new jobs,” he said. “For the Midwest, which has been plagued by human capital problems for some time, having more of our less skilled workers employed is very important for the long term.”
The calculations included estimated numbers for the Virgin Islands and Puerto Rico, as the Department of Labor noted that the claims review process has still not resumed normal operation since Hurricanes Irma and Maria last September.