U.S. jobless applications reach lowest level since early 70’s

For the week of July 18, 255, 000 jobless applications for state unemployment insurance were filed, marking the lowest level of seasonally adjusted claims since November of 1973. The number beat an average projection of 278,000 applications, based on the estimates of 47 economists.

The least amount of new unemployment filings in over 41 years, along with stronger payroll gains in the last two months have brought U.S. unemployment down to a seven year low of 5.3%.

Unemployment rate from the Bureau of Labor Statistics

10 year unemployment rate from the Bureau of Labor Statistics

The four week moving average of unemployment claims, a more reliant measure of weekly firings, has also been trending down to a current level of 278,500 (-4,000). State claims reached a 2015 high of 325,000 in February, but have stayed below 300,000 for 17 consecutive weeks now.

“We just wrapped up the U.S. auto industry’s best six months in a decade,” said Kurt McNeil, vice-president of U.S. sales for General Motors. He added that, “the second half of the year should be strong, too.”

Some, however, may dismiss the record-low number of jobless claims as a fluke, when week-to-week job volatility is high because of temporary auto-assembly plant closings and less mid-summer school staff.

Others, like leading unemployment forecaster Russell Price disagree with that notion.

“Companies are holding on to employees because they’re needed not just to satisfy current demand but also for growth initiatives,” said Price. “It’s yet another sign that we’re likely to see solid economic expansion in the second half.”

So, it looks like the U.S. economy is starting to pick up steam again. Now, if the voters could only elect lawmakers who were willing to solve financing issues to fund important infrastructure projects (airports, highways, trains, and bridges), America would be the material envy of the world once again.