The number of people filing initial applications for U.S. state unemployment benefits fell unexpectedly last week, dropping to its lowest level in almost 45 years as the labor market moves toward full employment, the government reported Thursday, increasing expectations of faster wage growth this year. The Labor Department said jobless claims decreased by 9,000 to 221,000 last week. Claims fell as low as 216,000 in mid-January, the lowest level since 1973. Last week was the 153rd consecutive week that claims remained below 300,000, a level associated with an improving labor market, and the longest such stretch since 1970, when the population was far smaller. The four-week moving average of jobless claims—a better gauge of labor market trends because it smoothes weekly volatility—dropped 10,000 to 224,500 last week, the lowest level since March 1973. The claims report also showed the total number of people receiving unemployment benefits fell 33,000 to 1.92 million last week. The four-week moving average of continuing claims rose 12,500 to 1.95 million. The labor market is near full employment, with the unemployment rate at a 17-year low of 4.1 percent. The tighter labor market finally is beginning to exert upward pressure on wage growth.
