Jobless claims drop 4,000 to 226,000

The numbers: The rate of layoffs in the U.S. as measured by initial jobless claims fell slightly in early March and clung near a 50-year low — a boon for workers and a headache for employers looking to hire.

Initial U.S. jobless claims declined by 4,000 to 226,000 in the seven days ended March 10, the government said Thursday. Economists surveyed by MarketWatch had forecast claims to total 228,000.

The more stable monthly average of claims dropped by 750 to 221,500.

The number of people already collecting unemployment benefits, known as continuing claims, rose by 4,000 to 1.88 million. Yet these claims dropped below 2 million last spring for the first time since 2000 and have remained there ever since.

What happened: Claims fell sharply in New York last week but were little changed in the rest of the country.
Layoffs in the U.S. have been falling for years and are at the lowest levels since the Nixon era. They are unlikely to rise much anytime soon with the labor market so strong.

Big picture: The jobs market is the best it’s been in at least two decades. Last week the government said 313,000 new jobs were created in February, an unusually large increase so late into an economic expansion. The current U.S. growth cycle will soon turn nine years old.

What’s more, the unemployment rate stands at a 17-year low of 4.1% and it’s likely to drop below that mark in the next few months. The last time unemployment was that low was in 2000.
With the labor market so hot, though, there’s a growing chance the Federal Reserve could raise U.S. interest rates more rapidly to head off a potential rise in inflation.