The number of Americans filing new claims for unemployment benefits unexpectedly fell last week to its lowest level in multiple years, a sign of a further tightening in the labor market.

Key Details

• Initial claims for state unemployment benefits dropped by 26,000 to a seasonally adjusted 259,000 for the week ended January 17, the Labor Department said on Thursday.
• That was the lowest level since April 2000.
• Economists had forecast claims rising to 290,000 last week.

The prior week’s claims were revised up to 285,000 from the previously reported 282,000.

Market Impact

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 16,000 to 283,250, the lowest level since February 2006.

A Labor Department analyst said there were no special factors influencing the data.

The claims data covered the survey week for January’s non-farm payrolls. Claims fell 34,000 between the December and January survey periods, suggesting further improvement in employment growth this month.

Non-farm payrolls increased 252,000 in December. The unemployment rate fell two-tenths of a percentage point to 5.6 percent, a 6-1/2-year low.