WASHINGTON (Reuters) – New US jobless claims fell last week, and the number of Americans receiving unemployment benefits fell back to 1973 levels, pointing to further worsening labor market conditions.
FILE PHOTO: Passers-by are walking in front of a help sign in a McDonald's restaurant in the Brooklyn district of New York, March 7, 201
Labor market strength was also underlined by another Thursday report from the Federal Philadelphia Reserve, which shows mid-Atlantic producers are boosting employment and working hours in October.
This, along with a robust economy, should keep the Federal Reserve on track to raise rates again in December. The US Federal Reserve raised interest rates for the third time this year in September, removing the reference to "expansive" monetary policy.
"The labor market is stretched by quantitative magnitudes, and companies are holding back on workers because of the difficulty in working," said John Ryding, chief economist at RDQ Economics in New York.
Initial claims for state unemployment benefits fell by 5,000 to a seasonally-adjusted 210,000 for the week ending October 13, the Department of Labor said. In the week ended September 15, claims fell to 202,000, the lowest level since November 1969.
Reuters surveyed economists forecast a decline in forecasts to 212,000 last week. The Department of Labor said that the lawsuits for South Carolina and North Carolina continue to be affected by Hurricane Florence, which soaked up the region in mid-September. Claims for Florida were influenced by Hurricane Michael.
The four-week moving average of initial applications, which is considered a better measure of labor market development as it blurs volatility from week to week, rose 2,000 to 211,750 last week.
The claims data related to the survey period for the Nonfarm Payrolls component of the October Employment Report. As the four-week moving average of claims increased by 5,750 between the September and October surveys, this did not change expectations of a recovery in employment growth this month after Florence pushed down restaurant and retail sales in September.
"We believe employment growth could recover in October as the weakness of the September report surrounding Hurricane Florence reverses," said Daniel Silver, JP Morgan economist in New York.
The economy created 134,000 jobs in September, the least in a year. The labor market is considered close or full-time, with the unemployment rate close to a 49-year low of 3.7 percent. There is a record of 7.14 million open jobs.
CRAZY UNEMPLOYED ROLLS
The Fed-meeting minutes of 25-26. September showed that policy makers "generally agreed that (labor) conditions continued to strengthen" and united the need to raise interest rates further.
The dollar strengthened against a basket of currencies and US Treasury yields rose marginally. Wall Street stocks were down and weighed down by a series of weak earnings reports from industrial companies.
The Thursday's claims report also showed that after the first week of assistance, the number of beneficiaries declined by 13,000 to 1.64 million in the week ended October 6, the lowest level since August 1973. The four-week sliding one Average of continuing claims fell to 1.65 million by 1250, also the lowest level since August 1973.
In a separate report, the Philadelphia Fed announced that employment in factories in the region – that of eastern Pennsylvania, the southern New Jersey and Delaware includes – rise in October. It said more than 30 percent of responding companies reported rising payrolls this month.
The Philadelphia Fed Employment Index rose 2 points this month to 19.5, and companies also reported rising working hours. The workweek index rose in September from 14.6 to 20.8.
The survey's economic index fell from 22.9 points in September to 22.2 points in October, with new orders down. But companies were optimistic about new orders over the next six months and many expected their investments to increase in 2019.
Companies also reported rising prices for their goods, with survey prices rising 4.5 points to 24.1 in October. Further price increases are expected over the next six months.
While more companies reported paying more for commodities this month, the survey's price index fell 1.4 points to 38.2. The index of paid prices fell 15 points in September. The results of the survey suggest that inflation could rise in the coming months.
"The pricing power of companies is likely to grow, and inflation is likely to accelerate," said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.
Reporting by Lucia Mutikani; Editing by Andrea Ricci