The number of Americans filing for unemployment benefits unexpectedly fell last week to near a 43-year low, an indication of firmness in the labour market which may support an interest rate increase by the US Federal Reserve this year. Initial claims for state unemployment benefits declined 5,000 to a seasonally adjusted 249,000 for the week ended Oct. 1, the Labour Department said on Thursday. Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 257,000 in the latest week.
First-time claims were the lowest since April, when initial applications for aid were at levels not seen since November 1973. US futures slightly trimmed losses following the release of the data, while the dollar held gains against a basket of currencies. Treasury debt yields were slightly higher. The four-week moving average of new claims, seen as a better measure of labour market trends as it smoothes out volatility, fell 2,500 to 253,500 last week, the lowest level since December 1973.
It's the 83rd consecutive week claims have remained below 300,000, which is seen as indicative of a strong labour market. The robust reading comes a day before the release of the closely watched September jobs report, although it has no direct bearing on that release as it falls outside the survey period for payrolls. Economists polled by Reuters forecast nonfarm payrolls increasing by 175,000. The unemployment rate is seen holding steady at 4.9 percent.
Jobs growth has been slowing but is still well above the threshold needed to absorb new entrants into the labour market. A report by global outplacement consultancy Challenger, Gray & Christmas on Thursday showed layoffs rose in September from a month earlier but were down from a year ago. Employers announced plans to shed 44,324 workers from payrolls in September, 38 percent more than in August but 25 percent fewer than in September 2015.
Despite the September increase, the third quarter saw an overall decline in planned layoffs. The US Federal Reserve has said it is inclined to raise rates by the end of the year should the labour market and inflation continue to strengthen. Thursday's claims report also showed continuing claims, which tallies how many people are still receiving benefits after an initial week of aid, fell 6,000 to 2.058 million in the week ended September 24. The four-week average fell 21,000 to 2.095 million. Those levels were last seen in 2000.