New applications for U.S. unemployment benefits unexpectedly fell last week and the number of Americans on jobless rolls declined to a near 44-1/2-year low, pointing to a rapidly tightening labor market.
Initial claims for state unemployment benefits dropped 4,000 to a seasonally adjusted 218,000 for the week ended June 9, the Labor Department said on Thursday. Claims data for the prior week was unrevised.
Economists polled by Reuters had forecast claims rising to 224,000 in the latest week. The Labor Department said claims for Maine and Hawaii were estimated last week.
The four-week moving average of initial claims, viewed as a better measure of labor market trends as it irons out week-to-week volatility, fell 1,250 to 224,250 last week.
The labor market is considered to be close to or at full employment, with the jobless rate at an 18-year low of 3.8 percent. The unemployment rate has dropped by three-tenths of a percentage point this year. It is near the Federal Reserve’s forecast of 3.6 percent by the end of this year.
The U.S. central bank on Wednesday raised interest rates for a second time this year and projected two more rate hikes in the second half of 2018. It said the labor market “continued to strengthen” and that job gains have been “strong.”
Layoffs have remained very low amid signs of growing worker shortages across all sectors of the economy. There were a record 6.7 million job openings in April. The number of unemployed people per vacancy slipped to 0.9 from 1.0 in March, indicating that most people looking for a job are likely to find one.
The claims report also showed the number of people receiving benefits after an initial week of aid declined 49,000 to 1.70 million in the week ended June 2, the lowest level since December 1973. The four-week moving average of the so-called continuing claims decreased 3,750 to 1.73 million, also the lowest level since December 1973.