WASHINGTON (AP) – The number of people seeking U.S. unemployment aid plunged last week to the lowest level in nearly 42 years, evidence that employers are holding onto their staffs and likely hiring at a steady pace. Yet the drop also reflects seasonal volatility in the data.
Weekly applications for unemployment benefits fell 26,000 to 255,000, the lowest level since November 1973, the Labor Department said Thursday. If the data were adjusted for the growth of the U.S. population since then, last week’s figure would likely be an all-time low.
The four-week average, a less volatile number, fell 4,000 to 278,500.
One reason for the drop, however, is that auto plants and other factories close briefly in July to prepare for next year’s models. That pushed up applications in the previous two weeks. Now that many factories have reopened, applications have fallen back.
“We should always take this summer period for claims with a grain of salt,” said Jennifer Lee, an economist at BMO Capital Markets. “From a long-term perspective, we’re still looking at claims bobbing around at the lowest level in ages.”