The number of Americans filing new claims for unemployment benefits fell close to pre-pandemic levels last week as the labour market recovery continues.
However, a shortage of workers in the US remains an obstacle to faster job growth.
The weekly unemployment claims report from the Labor Department today, the most timely data on the economy's health, also showed jobless benefit rolls declining to a 20-month low in early November.
The economy is regaining momentum following a lull over the summer as a wave of Covid-19 infections driven by the Delta variant battered the nation.
Initial claims for state unemployment benefits slipped 1,000 to a seasonally adjusted 268,000 for the week ended November 13, the Labor Department said today.
That was the lowest level since the start of the coronavirus pandemic in the US more than 20 months ago.
Economists polled by Reuters had forecast 260,000 applications in the latest week.
The smaller decline was because the model that the government uses to strip out seasonal fluctuations from the data was less generous last week.
Unadjusted claims dropped 18,183 to 238,850 last week. The decrease was led by Kentucky, likely due to car workers returning to factories after temporary layoffs as motor vehicle manufacturers deal with a global semiconductor shortage.
There were also big declines in Michigan, Tennessee and Ohio, which have a strong presence of auto manufacturers. The decreases offset a surge in filings in California.
The seventh weekly decline in claims in a row left them just above the 256,000 level in mid-March 2020, and in a range that is associated with a healthy labour market.
Claims have declined from a record high of 6.149 million in early April 2020.
The continued improvement is consistent with other data that have suggested an acceleration in economic activity early in the fourth quarter after gross domestic product increased at its slowest pace in more than a year in the three months from July to September.
US retail sales surged in October and production at factories also rebounded sharply.
Today's claims report showed the number of people continuing to receive benefits after an initial week of aid dropped 129,000 to 2.080 million in the week ended November 6. That was also the lowest level since the middle of March in 2020.
A total 3.185 million people were collecting unemployment checks under all programmes the week ended October 30.
Shrinking unemployment rolls raise hopes that more people will return to the labour force soon. Millions of unemployed Americans remain at home even after the expiration of generous federal government-funded benefits and the reopening of schools for in-person learning.
The claims data covered the period during which the government surveyed business establishments for the nonfarm payrolls component of November's employment report.
Claims have dropped since the middle of October, which would suggest stronger employment growth this month. But there is an acute shortage of workers, with 10.4 million job openings as of the end of September.
The US economy created 531,000 jobs in October. Employment growth has averaged 582,000 jobs a month this year and the labour force is down 3 million from its pre-pandemic level.
