The numbers: New filings for unemployment benefits fell to a two-and-a-half month low of 214,000 in mid-March, showing that demand for labor is still extremely high as the economy recovers from the pandemic.
Initial jobless claims declined by 15,000 from a revised 229,000 in the prior week, the Labor Department said Thursday.
Economists polled by The Wall Street Journal had forecast initial jobless claims to total a seasonally adjusted 220,000 in the seven days ended March 12.
Jobless claims appear on track to fall near or even below 200,000 again. They briefly sank to a 52-year low of 188,000 at the end of last year.
Big picture: Job openings are at record highs and layoffs are at record lows.
The chief problem companies face is finding enough workers during the biggest labor shortage in modern times. Even then, the economy has still managed to create an average of 582,000 new jobs a month in a the past three months.
So long as demand for labor is strong, the U.S. economy is likely to keep growing at a steady pace. The biggest risks in the short run are high inflation —- exacerbated by the war in Ukraine — and the potential spread of another strain of the coronavirus.
Key details: Raw or unadjusted jobless claims fell in more than half the states, including a large decline in New York that reversed a big increase in the previous week.
The only state to post a sizable increase in new claims was Michigan.
The number of people already collecting unemployment benefits, meanwhile, declined by 71,000 to 1.42 million in the week ended March 5. That’s a new pandemic low.
These so-called continuing claims, which are reported with a one-week lag, have fallen below pre-crisis levels and are extremely low.
Looking ahead: “Demand for labor is strong and there are no reasons to believe that this will change any time soon, barring another wave of a new COVID variant,” money market economist Thomas Simons of Jefferies wrote in a note to clients.
“We expect that both initial and continuing claims will be biased toward heading lower in the weeks ahead.”
Market reaction: The Dow Jones Industrial Average DJIA, +1.55% and S&P 500 SPX, +2.24% were set to open lower in Thursday trades. Stocks surged in the past two days after an extended losing streak triggered by the Russian war on Ukraine.