Initial filings for unemployment insurance dipped last week and remained close to their lowest level in more than 50 years, the Labor Department reported Thursday.
Jobless claims for the week ended Dec. 25 totaled 198,000, less than the 205,000 Dow Jones forecast and a dip of 8,000 from the previous period.
When adjusting for weekly volatility, the four-week moving average for claims came to 199,250, the lowest level since Oct. 25, 1969.
Continuing claims, the data for which runs a week behind the headline number, dropped by 140,000 to 1.72 million, the lowest level since March 7, 2020, just before the Covid pandemic declaration.
The numbers reflect an increasingly tight labor market and come with the Federal Reserve pulling back on some of the historically accommodative policy it put in place during the crisis. The national unemployment rate has dropped to 4.2%, a far cry from the 14.8% peak in April 2020.
Despite the downward trend in initial claims, the total of those receiving benefits under all programs rose by nearly 40,000 to 2.18 million, according to data through Dec. 11.
Some of the decline in claims has come from the ending of benefits through programs created during the pandemic that provided enhanced and extended payments. Still, the total getting benefits is a far cry from where it was a year ago when 20.5 million were on the various programs.
The jobs market also has seen a record pace of people quitting their jobs, many for better opportunities elsewhere as average hourly earnings climbs in an inflationary environment the U.S. has not seen in decades.
The Fed has responded to inflation by speeding up the pace at which it is reducing its monthly bond purchases. That program is expected to be completed in a few months, and markets expect the central bank to start raising interest rates in March 2022.