New applications for unemployment insurance benefits plunged 9,000 to 221,000 to start February, the Department of Labor reported Thursday, bringing the monthly average for such claims down to the lowest level in nearly 45 years.
Forecasters had expected claims to rise slightly from 230,000 to about 235,000. Instead, they dropped to the second-lowest level of the recovery.
With Thursday's report, the four-week moving average of claims fell to 224,500, the lowest such mark since March of 1973. Then, the total workforce was only about half of what it is today, making this month's low number more impressive.
Low jobless claims are a good sign for the economy, as they suggest that layoffs are rare.
Thursday's numbers are also a sign that the labor market is still heating up, even going on eight years into the jobs recovery.
"No wonder companies are spending their tax cuts on their employees," noted Chris Rupkey, an economist for MUFG. "It has never been more true that good help is hard to find."
There are reasons to believe that the labor market will tilt more in favor of workers in the months ahead. New claims are well below the level — about 300,000 — that would suggest that unemployment would rise. Meanwhile, the Trump-signed tax cuts are beginning to add stimulus to the economy this year.
The Trump administration has said that it aims not just to lower unemployment, but also to bring more people into the workforce, providing jobs for people who are not even looking for work today.
With signs that the labor market is tightening, the Federal Reserve may move to more quickly raise interest rates and slow overall spending. The threat of faster rate hikes may have played a role in the past few days' stock market volatility.
Claims are adjusted for seasonal variations.