US jobless claims plunge to lowest level since 1969

The numbers: Initial jobless benefit claims fell by 28,000 to 187,000 in the week ended March 19, the U.S. Labor Department said Thursday.

That’s the lowest level since September 1969.

Economists polled by the Wall Street Journal had expected claims to total 210,000.

Key details: The number of people already collecting jobless benefits fell by 67,000 to 1.35 million. These so-called continuing claims are at their lowest level since the 1970s.

Big picture: With workers scarce, companies are not laying off workers.

Last week, Federal Reserve Chairman Jerome Powell called the labor market “extremely tight,” noting that wages are rising at the fastest pace in a long time. Layoffs are expected to remain low for now. Once looming Fed interest rate hikes bite, there could be some pain in the labor market.

The drop in claims completes the reversal of the spike triggered by the omicron variant, said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Looking ahead: “At this point, most jobless claims are due to normal friction in the labor market and, more recently, occasional manufacturing shutdowns due to supply shortages. We expect claims to settle into a pace around 200,000, ”said the economic team at Contingent Macro.

Market reaction: US stocks DJIA,
+ 0.57%

SPX,
+ 0.56%
were set to open higher Thursday. The yield on the 10-year Treasury note TMUBMUSD10Y,
2.348%
rose to 2.373%.

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