U.S. weekly jobless claims fall; productivity slows in third quarter

WASHINGTON (Reuters) – New applications for U.S. unemployment aid fell last week.

Other data on Thursday, October 24th, 2009, 2:15 pm A few years ago, but still growing at a relatively decent clip, and a surging, adding to recent reports and anecdotal evidence that the strong labor market was pushing up wage gains.

Initial claims for state unemployment benefits dropped 2,000 to a seasonally adjusted 214,000 for the week ended Oct. 27, the Labor Department said. Data for the prior week was revised to show. Claims fell to 202,000 during the week ended Sept. 15, which was the lowest level since November 1969.

Economists polled by Reuters had forecast claims falling to 213,000 in the latest week. The Hurricane Florence, while Hurricane Michael impacted those for Florida and Georgia.

The four-week moving average of initial claims, rose to 1.750 to 213.750 last week.

The claims data has no bearing on the employment report, which is scheduled for release on Friday, as it falls outside the survey period.

According to a Reuters survey of economists, nonfarm payrolls probably rebounded by 190,000 jobs in October after Florence's depressed restaurant and retail payrolls in September. But the pick-up in the job growth was likely tempered by Michael, which struck the Florida Panhandle in mid-October.

Payrolls increased by 134,000 in September, the fewest in a year. The unemployment rate is forecast at 49-year low of 3.7 percent in October.

U.S. financial markets were little moved by the data.

NEAR FULL EMPLOYMENT

The labor market is viewed at full employment. There are a record 7.14 million open jobs in the economy.

Thursday's claims report also showed the number of people receiving benefits after 7,000 to 1.63 million for the week ended Oct. 20, the lowest level since July 1973. The four-week moving average of the so-called continuing claims decreased from 6,250 to 1,64 million, the lowest level since August 1973.

In a second report on Thursday, the Labor Department said that productivity, which measures the hourly output per worker, increased at a 2.2 percent annualized rate in the third quarter.

That was a step down from the 3.0 percent pace in the April-June period, which was the strongest since the first quarter of 2015. The slowdown in productivity is in line with this trend.

The economy grew at a robust 4.2 percent pace in the second quarter. Compared to the third quarter of 2017, the rate of growth was 1.3 percent.

Hourly compensation jumped to a 3.5 percent rate in the third quarter after a 1.9 percent pace in the April-June period. Hourly compensation increased at 2.8 percent rate compared to the third quarter of 2017.

The rise in compensation mirrors a solid gain in employment costs in the third quarter. The Labor Department reported on Wednesday that the annual wage growth rate increased by 10 years in the July-September quarter.