Jobless Claims Plunge to Lowest Level Since 1973

The number of people who applied for U.S. unemployment benefits slid to the lowest level since 1973 in the seven days ended July 18, another sign of strong labor-market conditions.

New applications for U.S. unemployment benefits declined by 26,000 to 255,000 in the seven days ended July 18. New claims have been under key 300,000 since late February, the longest run in 15 years.

While economists are likely to be skeptical of this week’s drop, which put claims at the lowest level since November 1973, the data should provide ammunition for those Federal Reserve officials who have been pushing for higher interest rates.

The consensus had been for a small increase in jobless claims. But retoolings at auto plants and other seasonal quirks typical in midsummer make it hard for government economists to adjust the report for seasonally variations. July is one of the most volatile months for jobless claims. Companies don’t always shut down plants in the same week each year or lay off the same number of workers.

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