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U.S. Jobless Claims Plunge to Lowest Weekly Tally Since 1973

Plummeting unemployment filings shows signs that companies are increasingly holding on to their employees amid a shortage of skilled labor.

by Katia Dmitrieva

U.S. filings for unemployment benefits plummeted to the lowest level in almost 45 years in a sign the job market will tighten further in 2018, Labor Department figures showed Thursday.

Jobless claims decreased by 41k to 220k (est. 249k); lowest level since Feb. 1973, biggest drop since April 2009 Continuing claims rose by 76k to 1.952m in week ended Jan. 6 (data reported with one-week lag). Four-week average of initial claims, a less-volatile measure than the weekly figure, fell to 244,500 from the prior week's 250,750.

The drop in claims shows that companies are increasingly holding on to their employees amid a shortage of skilled labor. Businesses are struggling to find workers to fill positions, particularly in manufacturing and construction, as cited in some anecdotes for the Federal Reserve's Beige Book released Wednesday.

The figures suggest the unemployment rate of 4.1%, already the lowest since 2000, could be poised to decline further. The latest week for claims includes the 12th of the month, which is the reference period for the Labor Department's monthly employment surveys.

Caveats for the latest numbers include the fact that the week was sandwiched between two periods containing holidays, when data tend to be more volatile. In addition, more states than usual had estimated figures.

Prior week's reading was unrevised at 261,000 Unemployment rate among people eligible for benefits rose to 1.4% from 1.3% in previous week Claims were estimated for Arkansas, California, Hawaii, Kentucky, Maine, Puerto Rico, Virginia, Wyoming New York's unadjusted claims fell by 26,190 to 23,171; California's estimated, unadjusted claims rose by 11,994 to 59,284.

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