The US Department of Labor reported on Wednesday that the number of applicants for unemployment benefits last week fell to the lowest level in more than 52 years.
The total number of new applications is 199,000, a number that has not been seen since November 15, 1969, when the total number of claims was 197,000. The report easily exceeded the 260,000 points expected by Dow Jones, which was much lower than the 270,000 points of the previous week.
The Ministry of Labor did not point out any particular factors that led to the shocking decline, which may provide an important signal that the job market has been working hard to recover since the Covid-19 shock in March 2020.
The decline seems to be at least partly due to seasonal adjustments. The total number of unadjusted claims is 258,622, which is actually an increase of 7.6% from the previous week.
In other economic reports on Wednesday morning, GDP growth in the second quarter was slightly revised up to 2.1%, but it was lower than the expected 2.2%. In addition, durable goods orders fell by 0.5%, which was lower than expected growth of 0.2%.
As the number of weekly unemployment claims fell, the number of consecutive unemployment claims fell by 60,000 to 2.05 million. This is a new low during the pandemic and a strong signal that the labor market is clearly tightening.
According to data as of November 6, the number of people receiving benefits under all plans has fallen sharply, dropping by 752,390 people to 2.43 million.
The data comes as inflation in the United States is soaring at the fastest rate in 30 years. As manufacturers and service providers meet the ever-increasing demand, port and supply chain blockages are the main factors leading to price increases.
The decline in the number of initial claims for unemployment benefits each week may attract the attention of Fed policymakers. Although the job market has steadily improved, they still maintain crisis-level policies.
Although the Fed has stated that it will gradually reduce its monthly bond purchases, the market is closely watching when the central bank may start raising interest rates. According to the Chicago Mercantile Exchange’s FedWatch tracker, although officials have indicated that interest rates may be raised once in 2022, traders now say that the probability of three interest rate hikes next year is about 61%.
After the report was released, government bond yields rose, and Wall Street Prepare for negative opening In stock.
While the number of jobless claims has fallen, there are also signs that the summer economy will grow faster than originally expected, although not as fast as Wall Street expected.
According to data from the US Department of Commerce, GDP, the total amount of all goods and services produced, increased by one-tenth of a percentage point from the initial estimate of 2%, mainly due to the upward revision of consumer purchases and private inventory investment.
The report also saw that the increase in wages and salaries has been substantially revised, an increase of 301.1 billion US dollars, an increase of more than 50% from the original estimate.
Finally, another report showed that durable goods orders fell for the second consecutive month.
However, excluding transportation, durable goods orders increased by 0.5%, and excluding defense, they increased by 0.8%.
New orders for non-defense capital goods representing commercial investments fell 1.2% this month. However, shipments, outstanding orders and inventory have all increased.