The number of people applying for jobless benefits in the U.S. declined again last week to 192,000, marking the sixth consecutive week in which new claims have come in below 200,000.

The Labor Department said initial claims for state unemployment benefits dipped by 3,000 in the week that ended 0n February 18. The prior week’s estimate was revised up by 1,000 to 195,000.

The labor market has been surprisingly resilient this year following last year’s record pace of hikes by the Federal Reserve that central bank officials have described as an effort to bring down demand for workers. In January, the U.S. economy added 517,000 jobs and employers started the month with more than 11 million job openings, suggesting that the stance of monetary policy is not yet restrictive enough to bring the labor market into better balance.

Jobless claims can be volatile week-t0-week so many economists prefer to look to the four-week moving average of claims to discern the underlying trend in the labor market. Right now the average is telling the same story as the weekly numbers: the labor market is incredibly strong. The four-week average declined by 1,500 to 181,250.

Continuing claims get reported with a one-week delay. These fell by 37,000 from the previous week to 1,654,000. The four-week moving average of continuing claims was 1,668,759, a decrease of 3,000 from the previous week.

The strength of the labor market is frustrating efforts by the Federal Reserve to tame inflation. Chairman Jerome Powell has made it clear that he believes a softer labor market, with a better balance between the demand and supply of labor, is necessary to bring inflation down to the Fed’s target of two percent.

The Breitbart Business Digest, a free daily newsletter on economics and markets, recently explained the significance of ultra-low claims numbers.

The chart below which shows claims prior to the pandemic. We’ve excluded the years after the pandemic struck because the huge spike in 2020, in which weekly claims jumped to 6.2 million in the week ended April 4, would make the chart unreadable. What you can see here is that except for a few brief months during the Trump presidency, initial claims have never been below 200,000 since 1969. They’ve only rarely been below 300,000.

 

This number is not adjusted for the size of the workforce eligible for unemployment benefits. Back in 1969, for example, the labor force was half of what it is today. So, the level of people seeking jobless benefits as a share of the labor force was much higher back then than it is today.

Similarly, continuing claims are extremely low. These rose by 16,000 to 1,696,000 in the latest report. As you can see in the chart below, which ends in December 2019, we’ve almost never seen claims this low. Apart from the Trump-era, you have to go back to 1973 to get claims in this neighborhood.

 

Minutes from the Fed meeting at the start of February were released on Wednesday. These showed that Fed officials were worried that progress on inflation could stop if they did not adopt a policy that is tight enough. “A number of participants observed that a

policy stance that proved to be insufficiently restrictive could halt recent progress in moderating inflationary pressures,” the minutes said.

The most recent jobless claims numbes are likely to elevate this worry.