The numbers: Initial U.S. jobless claims fell by 7,000 to 222,000 in the seven days ended Feb. 17, marking the second lowest level since the end of the 2007-2009 recession. Economists surveyed by MarketWatch had forecast claims to total 230,000.
The more stable monthly average of claims declined by 2,250 to 226,000, the government said Thursday.
The number of people already collecting unemployment benefits, known as continuing claims, dropped by 73,000 to 1.88 million.
What happened: Applications for jobless benefits fell in most states.
After falling for years, initial jobless claims are now down to levels last seen in the early 1970s. Most firms continue to hire and the unemployment rate is at a 17-year low.
Big picture: For workers times are great. For companies not so much. Businesses are very hesitant to lay off workers, even subpar ones, amid a growing shortage of labor. In some cases, they are raising wages or offering better benefits to attract or retain employees.
The Federal Reserve is watching closely to see if the tightest labor market in almost two decades lead to a broad increase in worker pay and boosts U.S. inflation. The central bank would likely raise rates more aggressively if that took place.
Market reaction: Muted. The Dow Jones Industrial Average
and S&P 500 index
were set to open higher in Thursday trades, but investors are still jittery about pending increases in U.S. interest rates. The Fed is likely to raise the cost of borrowing next month.