New applications for U.S. jobless benefits unexpectedly fell last week and the number of Americans on unemployment rolls tumbled to a 28-1/2-year low, pointing to rapidly shrinking labor market slack.

The economy’s brightening prospects were further boosted by other data on Thursday showing a sharp acceleration in factory activity in the mid-Atlantic region this month.

While the raft of upbeat economic data support an interest rate hike next month, the Federal Reserve’s decision will also hinge on the state of financial markets, which have been rattled in recent days by Trump administration scandals.

Initial claims for state unemployment benefits decreased 4,000 to a seasonally adjusted 232,000 for the week ended May 13, the Labor Department said. That pushed claims close to levels last seen in 1973.

Claims have now decreased for three consecutive weeks. Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 240,000.

Claims have