The number of Americans filing new claims for unemployment benefits fell to their lowest level since 1969, pointing to continued strength in the economy as a year marked by shortages and an unending epidemic winds down.
Initial claims for unemployment benefits fell 71,000 to a seasonally adjusted 199,000 for the week ending November 20, the Labor Department said on Wednesday. It was the lowest level since mid-November 1969. The latest week, the economists polled by Reuters, had predicted 260,000 applications.
Since October, applications have declined, but the pace has slowed in recent weeks as applications approach the pre-pandemic average of about 220,000.
The report was published early because of the Thanksgiving holiday on Thursday.
The data could become noisy over the holiday season. In early April 2020, claims have declined from a record high of 6.149 million and are now in a zone considered as a healthy labor market, although an acute shortage of labor caused by the Pandemic is hindering job growth.
Employment growth has averaged 582,000 jobs per month this year. As of September, there were 10.4 million job openings. The workforce is down 3 million people from its pre-pandemic level, even as generous federal government-funded benefits have expired, schools are open for in-person learning and companies are raising wages.
The plunge in claims is consistent with data on retail sales and manufacturing production that suggest that the economy was regaining steam in the fourth quarter after hitting a speed bump in July-September as coronaviruses increased over the summer and shortages became more widespread.
A Commerce Department report on Wednesday confirmed the slowdown in growth in the third quarter. The government said in its second estimate of GDP growth for the period, gross domestic product increased at a 2.1% annualized rate.
It was still the slowest growth pace in more than a year, but was revised slightly up from the 2.0% pace of expansion reported in October. Economists polled by Reuters had predicted that third-quarter GDP growth would be raised to a 2.2% pace. The second quarter saw the economy grow at a 6.7% rate.
The upward revision reflected a more moderate inventory drawdown than originally estimated, which offset a big step-down in consumer spending.
It is all in the rear view mirror. Consumer spending has regained speed in October, with retail sales surged last month as Americans kicked off their holiday shopping early in order to avoid shortages and pay even more for scarce goods.