The number of Americans filing for unemployment benefits fell to a near 49-year low last week, pointing to sustained labor market strength, which should continue to underpin economic growth.
The labor market, which is viewed as being near or at full employment, is steadily boosting wage growth, which could help to support consumer spending as the stimulus from the Trump administration's $1.5 trillion tax cut package fades. Initial claims for state unemployment benefits dropped 8,000 to a seasonally adjusted 207,000 for the week ended Sept. 29, the Labor Department said on Thursday.
Data for the prior week was revised to show 1,000 more applications received than previously reported. Claims fell to 202,000 during the week ended Sept. 15, which was the lowest level since November 1969.
Economists polled by Reuters had forecast claims slipping to 213,000 in the latest week. The Labor Department said claims for South and North Carolina were affected by Hurricane Florence, which lashed the region in mid-September.
The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 500 to 207,000 last week.
U.S. financial markets were little moved by the report.
The claims data has no bearing on September's employment report, which is scheduled for release on Friday. According to a Reuters survey of economists, nonfarm payrolls likely increased by 185,000 in September after surging 201,000 in August. The unemployment rate is forecast falling one-tenth of a percentage point to 3.8 percent, an 18-year low first hit in May.
Payrolls growth could, however, surprise on the upside as data on Wednesday showed an increase in hiring by private companies in September and a jump in private sector jobs.
The Federal Reserve raised interest rates last week for the third time this year and removed the reference to monetary policy remaining "accommodative."
Thursday's claims report also showed the number of people receiving benefits after an initial week of aid fell 13,000 to 1.65 million for the week ended Sept. 22. The four-week moving average of the so-called continuing claims decreased 15,250 to 1.66 million, the lowest level since October 1973.