The Labor Department reported Thursday that weekly unemployment claims fell to a new low last week.
The lowest initial filings for unemployment insurance was in 1969 when 182,000 were filed.
According to a survey, initial claims for unemployment insurance were expected to total 211,000.
The total was the result of a large seasonal modification. The decline in claims, which fell from 227,000 the week before, is a positive sign for the labor market, which is still struggling with a worker shortage.
The number of continuing claims went up by 38,000 to just shy of 2 million. The four-week moving average for continuing claims fell to 2.03 million, a decline of 54,250.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote that a correction next week seems likely, but the trend in claims clearly is falling, reflecting the extreme tightness of the labor market and the rebound in GDP growth now underway. It is very risky for firms to let go staff unless they have other options, because re-hiring people later will be difficult and likely expensive.
The monthly payroll numbers were weaker than expected. Even with the unemployment rate sliding, November's hiring growth was just 210,000.
Gauging the progress in jobs is important now that the Federal Reserve is about to change its monetary policy and begin the process of normalizing.
The Fed is expected to reduce its purchases by $30 billion a month next week. As a result of that, it's believed that a rate hike could happen as soon as May 2022, according to current market pricing.
The policy pivot is in response to persistently high inflation.
The consume price index reading on Friday will give markets a new look at inflation. The growth of the consumer price index is expected to be the highest since 1982.
