America's Jobless Claims Are Near Their Lowest Point Since 1973

It's a single data point, but things could be looking up.

Mike Groll / AP

The Labor Department reported Thursday that jobless claims, the number of Americans filing for unemployment benefits for the first time, dropped to near a 42-year low last week—down 13,000 from the previous week at 263,000. Most economists are reading this as good news: Even though September’s disappointing job report signaled a slowdown in hiring, the U.S. labor market seems to still be fairly healthy, as the jobless number likely indicates that employers aren’t laying many people off.

But earlier this year, there was reason to believe the positive numbers were more the result of a lucky confluence of factors than a solid economy recovery. In July, jobless claims fell to the lowest level since 1973, at 255,000—a feat considering that the U.S. workforce has grown tremendously since then. But some experts argued that number was due to seasonal factors that might have escaped adjustments, such as equipment maintenance in the auto industry and summer employment.

Further, since the recession there have been concerns that America’s proportion of “missing workers” has risen. That is to say that the so-called real unemployment rate is higher than the Labor Department number because displaced workers are no longer seeking employment, so they don’t get counted. The Economic Policy Institute estimates there are some 4 million such “missing workers.” The U.S. labor-force participation rate, at 62.4 percent in September, is at a 38-year low. So even if jobless claims are at a record low, there’s still lots of room for improvement.

For jobless workers, another concern is that the proportion of unemployed workers receiving benefits are at a record low. The National Employment Law Project reports that only 27 percent of unemployed workers received unemployment insurance last year. Florida and South Carolina were at the bottom—paying benefits to just 12 percent of out-of-work people in their states.