What's behind lowest level of unemployment applications in 42 years?

The number of people applying for jobless benefits matched a March record that was the lowest since 1973, the Labor Department said Thursday. That may mean companies are holding onto workers for longer.

The number of Americans applying for unemployment benefits dropped rapidly last week, matching a record set in March that was the lowest since 1973.

During the week that ended April 9, applications for jobless benefits dropped 13,000, to a seasonally adjusted 253,000, the Labor Department reported Thursday.

An increase in unemployment applications is often seen as a proxy for an increase in layoffs, whereas a decline in people applying for the benefits – where workers’ eligibility varies from state to state – suggests that companies are holding onto their workers for longer.

Coupled with an increase of 215,000 jobs in March, the numbers may be a positive sign for workers and employers.

“Jobless claims are running really low and all other labor market data are telling us that the economy is creating a lot of jobs,” said Patrick Newport, an economist at IHS Global Insight in Lexington, Mass., reported Bloomberg News. “This is further confirmation that the labor market is strong.”

For 58 weeks, claims for unemployment have been below 300,000, the longest consecutive period claims have been that low since 1973, the Labor Department says.

Last month, the Labor Department also found a slight increase in unemployment from 4.9 to 5 percent.  But that can be attributed to mostly a positive reason – more people who hadn’t been looking for work began a job hunt. While some found jobs, others weren’t hired immediately, boosting the unemployment level slightly, the Associated Press reports.

The four-week average in people applying for unemployment benefits – a figure considered less volatile than the weekly numbers – decreased by 1,500 from the previous week to 265,000, according to the Labor Department’s recent data.

The number of people continuing to receive unemployment benefits also dropped by 18,000 to a seasonally-adjusted figure of 2.17 million in the week that ended April 2nd. That is the lowest level since mid-October, Bloomberg reports.

But some economists have also noted that despite common predictions of a rosy jobs picture nearly a decade after the 2008 recession, the US is still far from full employment. 

Despite companies adding jobs, in the United States there are still 14 jobseekers for every 10 openings, noted economist Elise Gould in a blog post last week for the Economic Policy Institute, a think tank affiliated with the labor movement.

The number of job openings compared to unemployed workers can also vary considerably depending on the industry, she found.

For example, there were 1.1 million job openings in professional and business services, compared to 880,000 unemployed workers in that industry.

But in construction, there were 150,000 jobs for 600,000 unemployed workers – or four workers for every open construction job in a period ending in December 2015.

In his State of the Union address to Congress in January, President Obama alluded to that issue, noting many workers had increasingly been forced to embrace temporary work or a lack of benefits.

“We also need benefits and protections that provide a basic measure of security,” he said. “It’s not too much of a stretch to say that some of the only people in America who are going to work the same job, in the same place, with a health and retirement package for 30 years are sitting in this chamber.”

Soon after, he introduced a proposal for a standard system of unemployment benefits that would apply across every state.

Under the plan, unemployment benefits would last for up to 26 weeks. States with high unemployment rates could also receive federal funding to provide up to 52 weeks of unemployment benefits. The effort came as part of his budget proposal, on which Republican lawmakers declined to hold hearings this winter.

“It’s a way to give families some stability and encourage folks to rejoin the workforce – because we shouldn’t just be talking about unemployment,” Mr. Obama said in his weekly address in mid-January, “we should be talking about re-employment.”