New applications for U.S. jobless benefits dropped to a 52-year low last week, while the number of Americans on unemployment rolls continued to shrink, pointing to rapidly diminishing labor market slack that will keep wage inflation rising.

Initial claims for state unemployment benefits fell 28,000 to a seasonally adjusted 187,000 for the week ended March 19, the lowest level since September 1969, the Labor Department said on Thursday.

Economists polled by Reuters had forecast 212,000 applications for the latest week. Claims have declined from a record high of 6.149 million in early April 2020.

Companies are desperate for workers. There were 11.3 million job openings at the end of January, with a record 1.8 open positions per unemployed person.

This misalignment between demand for labor and supply is boosting wage growth, which is providing some cushion to households against the soaring gasoline prices, as well as feeding into high inflation.

The claims report also showed the number of people receiving benefits after an initial week of aid decreased 67,000 to 1.350 million during the week ended March 12, the lowest since January 1970. The so-called continued claims data covered the period during which the government surveyed households for March's unemployment rate.

Continued claims declined between the February and March survey periods. The unemployment rate fell to a two-year low of 3.8 percent in February.