Economic Indicators

US weekly jobless claims rise moderately; productivity surges in Q3

2023.11.02 10:58


© Reuters. FILE PHOTO: People line up outside Kentucky Career Center prior to its opening to find assistance with their unemployment claims in Frankfort, Kentucky, U.S. June 18, 2020. REUTERS/Bryan Woolston/File Photo

By Lucia Mutikani

WASHINGTON (Reuters) -The number of Americans filing new claims for unemployment benefits increased moderately last week as the labor market continued to show few signs of a significant slowdown.

While the weekly jobless claims report from the Labor Department on Thursday also showed unemployment rolls rising to a six-month high, economists were divided on whether this suggested a material change in the underlying trend. The so-called continuing claims have been rising since mid-September.

Some economists shrugged off the increase, which they blamed on difficulties adjusting the data for seasonal fluctuations, noting a similar pattern last year over the same period, which was not accompanied by an uptick in the unemployment rate. Others believed this was a sign that laid-off workers were experiencing longer spells of unemployment.

“The sustained increase in continuing claims since Labor Day appears to be a seasonal adjustment phenomenon, as a similar upswing occurred last year,” said Lou Crandall, chief economist at Wrightson ICAP (LON:) in New York. “We would not give any weight to the increase at this point. It seems likely to be revised away in next spring’s annual revisions.”

Initial claims for state unemployment benefits rose 5,000 to a seasonally adjusted 217,000 for the week ended Oct. 28. Economists polled by Reuters had forecast 210,000 claims for the latest week. Though the labor market is gradually cooling, conditions remain tight, highlighting the economy’s enduring strength. The government reported on Wednesday that there were 1.5 job openings for every unemployed person in September.

The U.S. central bank held interest rates steady on Wednesday but left the door open to a further increase in borrowing costs in a nod to the economy’s resilience. Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.

Unadjusted claims rose 2,768 to 196,767 last week. There were notable increases in California, Michigan and North Carolina, which more than offset a sharp decline in New York.

The number of people receiving benefits after an initial week of aid, a proxy for hiring, advanced 35,000 to 1.818 million during the week ending Oct. 21. That was the highest level for continuing claims since mid-April.

Nevertheless, the labor market remains resilient. A separate report on Thursday from global outplacement firm Challenger, Gray & Christmas showed U.S.-based employers announced 36,836 job cuts in October, down 22% from September. Planned layoffs were up 9% compared to October last year.

U.S. stocks opened higher. The dollar fell against a basket of currencies. U.S. Treasury prices rose.

LOW LAYOFFS

The claims report has no bearing on October’s employment report, which is scheduled to be released on Friday, as the data fall outside the survey period.

According to a Reuters survey of economists, nonfarm payrolls likely increased by 180,000 last month after rising by 336,000 in September. The anticipated decline in job growth would partly reflect the end of strikes by the United Auto Workers (UAW) union against Detroit’s Big Three car makers.

The government reported last week that there were at least 30,000 UAW members on strike during the period it surveyed business establishments for October’s employment report.

There was encouraging news on the inflation front. A report from the Labor Department’s Bureau of Labor Statistics showed worker productivity grew at its quickest pace in three years in the third quarter, depressing labor costs.

Nonfarm productivity, which measures hourly output per worker, increased at a 4.7% annualized rate last quarter, the fastest since the third quarter of 2020. That followed a 3.6% pace of growth in the April-June quarter.

Economists had forecast productivity would increase at a 4.1% rate last quarter. The surge in productivity was flagged by a report last week showing the economy growing at its fastest pace in nearly two years in the third quarter. Productivity grew at a 2.2% pace from a year ago.

Unit labor costs – the price of labor per single unit of output – fell at a 0.8% rate in the third quarter. They grew at a 3.2% pace in the prior quarter.

Unit labor costs rose at a 1.9% rate from a year ago. The moderate annual rise is a step in the right direction towards bringing inflation down to the Fed’s 2% target.

“Unit labor costs are a good indicator for the direction of core inflation,” said Jay Hawkins (NASDAQ:), a senior economist at BMO Capital Markets in Toronto. “Thus, the Fed will take comfort in the third-quarter decline, along with lower core inflation readings over the summer, and likely remain on the sideline.”

Source link

Related Articles

Back to top button
bitcoin
Bitcoin (BTC) $ 98,487.39 5.30%
ethereum
Ethereum (ETH) $ 3,488.36 4.04%
tether
Tether (USDT) $ 0.998733 0.04%
xrp
XRP (XRP) $ 2.32 6.30%
bnb
BNB (BNB) $ 693.66 1.51%
solana
Solana (SOL) $ 196.05 6.13%
dogecoin
Dogecoin (DOGE) $ 0.333673 6.58%
usd-coin
USDC (USDC) $ 0.998757 0.20%
staked-ether
Lido Staked Ether (STETH) $ 3,482.19 3.98%
cardano
Cardano (ADA) $ 0.9375 5.63%
tron
TRON (TRX) $ 0.257368 2.82%
avalanche-2
Avalanche (AVAX) $ 41.03 10.71%
chainlink
Chainlink (LINK) $ 24.46 7.47%
the-open-network
Toncoin (TON) $ 5.77 5.02%
wrapped-steth
Wrapped stETH (WSTETH) $ 4,128.90 3.67%
shiba-inu
Shiba Inu (SHIB) $ 0.000023 5.96%
sui
Sui (SUI) $ 4.57 7.00%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 98,206.31 5.40%
hedera-hashgraph
Hedera (HBAR) $ 0.32173 19.68%
stellar
Stellar (XLM) $ 0.405814 13.57%
polkadot
Polkadot (DOT) $ 7.51 6.62%
hyperliquid
Hyperliquid (HYPE) $ 29.79 9.39%
weth
WETH (WETH) $ 3,485.43 3.96%
bitcoin-cash
Bitcoin Cash (BCH) $ 474.37 7.26%
leo-token
LEO Token (LEO) $ 9.48 0.50%
uniswap
Uniswap (UNI) $ 14.46 5.28%
litecoin
Litecoin (LTC) $ 109.26 7.42%
pepe
Pepe (PEPE) $ 0.000019 7.46%
wrapped-eeth
Wrapped eETH (WEETH) $ 3,676.70 3.89%
bitget-token
Bitget Token (BGB) $ 4.86 19.61%
near
NEAR Protocol (NEAR) $ 5.56 7.65%
ethena-usde
Ethena USDe (USDE) $ 0.998188 0.13%
aave
Aave (AAVE) $ 374.84 7.29%
aptos
Aptos (APT) $ 9.72 4.52%
internet-computer
Internet Computer (ICP) $ 11.15 9.71%
usds
USDS (USDS) $ 1.00 0.16%
crypto-com-chain
Cronos (CRO) $ 0.16566 5.59%
polygon-ecosystem-token
POL (ex-MATIC) (POL) $ 0.526889 9.64%
vechain
VeChain (VET) $ 0.053159 14.98%
ethereum-classic
Ethereum Classic (ETC) $ 28.11 6.25%
mantle
Mantle (MNT) $ 1.23 4.78%
render-token
Render (RENDER) $ 7.83 9.44%
bittensor
Bittensor (TAO) $ 496.70 8.49%
fetch-ai
Artificial Superintelligence Alliance (FET) $ 1.40 9.17%
mantra-dao
MANTRA (OM) $ 3.79 4.93%
whitebit
WhiteBIT Coin (WBT) $ 24.74 1.54%
monero
Monero (XMR) $ 191.45 0.39%
arbitrum
Arbitrum (ARB) $ 0.818458 6.16%
dai
Dai (DAI) $ 1.00 0.02%
filecoin
Filecoin (FIL) $ 5.50 10.67%