WASHINGTON, (Reuters) – Unexpectedly, U.S. unemployment claims rose last week. However, the labor market is tightening amid workers shortages. The number of Americans without jobs has fallen to its lowest level since 1969, in May.

The Labor Department reported that initial claims for state unemployment benefits rose 21,000 to 218,000 in the week ending May 14th, seasonally adjusted. This is the highest number since January. Reuters economists had predicted 200,000 applications in the most recent week.

Although claims are still in decline since March’s record low of 166,000, which was 53 years ago, there is a lot happening in the labor market that is tightening rapidly and creating strong wage growth. This helps to fuel overall inflation.

Due to high prices, the Federal Reserve was forced into an aggressive monetary policy.

From March, the U.S. central banks has increased its policy rate by 75 base points. At its June and July meetings, the Fed will likely increase overnight rates by half of a percent.

End March saw a record 11.5million job openings. The number of claims is down significantly from the record 6.137 million set in April 2020.

This week’s data covers the last week of government surveys to employers regarding the nonfarm payrolls part of May’s employment reports. The April-May survey period saw a rise in claims. In April, payrolls grew by 428,000. This was the 12th consecutive month with employment gains exceeding 400,000.

The next week will see more information on the state and prospects for job growth, including data from the mid-May ranks of unemployed.

The week ended May 7 saw a drop in the number of those receiving assistance from an initial week to just 25,000, to 1.31 million. It was the lowest ever level of so-called continued claims since December 1969.