US jobless claims fell last week to the lowest level in 15 years, a sign the labour market was firming after hitting a soft patch in March.
Jobless claims, or the number of Americans filling for first-time unemployment insurance benefits, declined by 34,000 to 262,000 in the week ended April 25, the Department of Labor reported on Thursday. That was well below the median estimate calling for 290,000 and the lowest level since April 15, 2000.
The four-week average for jobless claims, which weeds out week-to-week volatility, decreased 1,250 to 283,750. The previous week’s average was revised up by 500 to 284,500.
The number of Americans continuing to receive unemployment benefits declined by 74,000 to 2.253 million in the week ended April 18. That was the lowest level since December 2, 2000. The insured unemployment rate was unchanged at 1.7%, official data showed.
Weekly jobless claims are used to measure firings in the labour market and are read alongside the monthly job growth data. In March the Department of Labor said nonfarm payrolls grew by just 126,000, the slowest rate of hiring since December 2013. The latest jobless claims figures suggest employers were retaining staff at a steady pace following the first quarter slowdown.
The government will produce official nonfarm payrolls data next week, accompanied by average hourly earnings. A stronger labour market has failed to boost earnings in any meaningful way over the past year-and-a-half. On Thursday the Department of Commerce said personal income from all sources, including wages and salaries, was flat in March after rising 0.4% in February. Economists forecast an increase of 0.2%.
The labour market suffered a mild setback in the first quarter, stemming from broader declines in the rest of the economy. US gross domestic product barely grew in the first three months of the year after slowing to a 2.2 percent annual rate in the fourth quarter of 2014.
The Federal Reserve is using weak economic growth as a justification for keeping interest rates at record lows. The Federal Open Market Committee voted once again to keep the benchmark rate near zero on Wednesday and said that interest rates will probably remain low even as unemployment and inflation approach the central bank’s targets.
Policymakers are expected to begin gradually lifting interest rates sometime in the second half of the year.