(CNN) — New applications for unemployment benefits haven’t been this low since 1969, fresh data showed Thursday.
The number of first-time filings for unemployment benefits tumbled last week by 22,000 to an estimated 187,000 claims, marking the lowest seasonally adjusted tally since September 1969, according to the Department of Labor.
Jobless claims data can be highly volatile and is frequently revised (the latest number, for example, could be reflecting summer maintenance shutdowns at auto plants); however, it also can provide a timelier snapshot of shifts occurring in the labor market, which has seen a slowdown in hiring as well as in job cuts.
First-time claims are closely watched as a proxy for layoff activity, which appears to be subdued, Oliver Allen, senior US economist at Pantheon Macroeconomics, noted Thursday.
“Leading indicators – such as the Challenger job cuts series and WARN advance layoff notices – point to little change in the near term,” Allen wrote.
The US labor market’s low-hire, low-fire environment also has made it harder for people to find work.
Last year, the number of continuing claims, which are made by people who filed for unemployment insurance for a week or more, was consistently butting up against four-year highs.
They’ve moderated somewhat in the first half of this year.
Thursday’s Labor Department report showed that continuing claims filings inched down by 2,000 to just under 1.8 million for the week that ended on July 11 (continuing claims data lags by a week). Continuing claims have trended at this level for about three months.
The job market has been contending with a slew of headwinds recently. Rampant uncertainty, a lasting hangover from pandemic-era overhiring, plus the rise of AI and a cocktail of other economic concerns – persistently high inflation, elevated interest rates and a shrinking labor force – have stifled businesses’ expansion plans and put hiring on ice.
Last year’s job growth was one of the weakest on record, with employers adding fewer than 10,000 jobs per month.
Hiring picked up in the early part of this year but settled back down in June, with the economy adding a lower-than-expected 57,000 jobs. The unemployment rate dropped to 4.2% from 4.3%.
“The labor market looks on fire with the sharp decline in filings for first-time unemployment benefits in the July 18 week,” Christopher Rupkey, chief economist at FwdBonds, wrote in a note on Thursday. “The economy may be heating up today, but the path ahead for the employment markets could still be rockier with the escalation of the war in the Middle East causing a u-turn in energy prices virtually overnight this week.”
Global oil prices have shot back up to $100 a barrel amid a flare-up in the US and Israel’s war with Iran.
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