Jobless claims fall to lowest level since 1973

First-time claims for unemployment benefits fell sharply last week, a new 43-year low, as the labor market continues to outperform economic growth. 

Weekly applications decreased 13,000 to a seasonally adjusted 253,000, a sign that employers are holding on to their workers as the labor market tightens, the Labor Department said Thursday.

{mosads}The four-week average, a measure that better reflects the labor market’s trajectory, dipped by 1,500 to 265,000.

Ryan Sweet, director of Real Time Economics at Moody’s Analytics, said, “Though the recent slide in initial claims may overstate the health of the job market, the trend is solid and supports our view that the broader economy is doing better than GDP [gross domestic product] would otherwise suggest.

“The low level in initial claims suggest the economy is doing fairly well in April and GDP growth should bounce back after likely disappointing in the first quarter,” Sweet said.

The Verizon strike of more than 40,000 workers could eventually show up in the claims data but isn’t expected to reduce employment for the month of April, Sweet said.

Growth is expected to remain sluggish — estimates are coming in at around 0 to 1 percent — in the first three months of the year after the U.S. economy expanded at a modest 1.4 percent annual pace in the October-December quarter.

Mark Zandi, chief economist at Moody’s Analytics, said in a Tuesday analysis that while the January-March quarter will probably barely climb into positive territory, “The job numbers are a better representation of the reality of the economy’s performance and near-term prospects.”

He called the economy “a job machine” that has produced the longest-ever streak of monthly gains on record going back to September 2010.

Zandi blamed most of the weak growth figures on measurement problems.

“Despite yeoman efforts by the Bureau of Economic Analysis, the source of the GDP data, there remains a significant residual seasonality problem,” Zandi said.

“That is, GDP has a clear seasonal pattern, with the weakest growth not surprisingly during the winter months,” he said.

“But the BEA [Bureau of Economic Analysis] hasn’t been able to fully correct for this seasonality.”

The labor market has maintained a steady pace of hiring despite volatility in the domestic and global economies.

Weekly applications have remained below 300,000 — a level indicating a healthy labor market — for 58 straight weeks, the best streak since 1973. 

Employers added 215,000 jobs in March, and the unemployment rate ticked up slightly to 5 percent as more people entered the job market.