Jobless claims drop to lowest level in nearly 45 years
New applications for unemployment insurance benefits plunged by 41,000 to 220,000 in the second week of 2018, the Labor Department reported Thursday, the lowest level in nearly 45 years.
The report easily beat forecasters expectations for new jobless claims to drift down to around 250,000.
Low jobless claims are a good sign because they suggest that layoffs are relatively scarce. Federal Reserve officials and investors watch the numbers because they come out weekly, providing an early warning sign of any trouble.
New claims, which are adjusted for seasonal variations, are well below the mark that would suggest that unemployment is going to rise.
Thursday's number was likely artificially low because of the difficulties involved in adjusting for the seasonal affects of holiday hiring and winter weather. The extreme low level of claims "is probably an outlier," noted Jim O'Sullivan, chief U.S. economist for High Frequency Economics.