US economic data

us-data-3-11-16

The number of Americans filing for unemployment benefits rose to near a three-month high last week, but remained below a level associated with a strong labor market. Initial claims for state unemployment benefits increased 7,000 to a seasonally adjusted 265,000 for the week ended Oct. 29, the highest level since early August, the Labor Department said on Thursday. Claims for the prior week were unrevised.

It was the 87th consecutive week that claims remained below 300,000, a threshold associated with a healthy labor market. That is the longest stretch since 1970, when the labor market was much smaller.

Economists polled by Reuters had forecast first-time applications for jobless benefits would be unchanged at 258,000 in the latest week.


U.S. worker productivity increased at its fastest pace in two years in the third quarter, helping to curb growth in labor costs, but the trend remained weak.

The Labor Department said on Thursday that nonfarm productivity, which measures hourly output per worker, rose at a 3.1 percent annual rate. The increase ended three straight quarters of decline.

Productivity fell at a revised 0.2 percent rate in the second quarter, which was previously reported as a 0.6 percent pace of decline. Economists polled by Reuters had forecast productivity rising at a 2.0 percent rate in the third quarter.

Productivity was unchanged compared to the third quarter of 2015.

The surge in third-quarter productivity was flagged by a report last week showing an acceleration in gross domestic product during the same period.

The economy grew at a 2.9 percent pace in the third quarter after expanding at a 1.4 percent rate in the April-June period.

Output per worker in the third quarter jumped at a 3.4 percent rate, also the fastest pace since the third quarter of 2014. That was up from the 1.6 percent pace notched in the April-June period.

The increase in output came despite total hours worked rising only at a 0.3 percent rate in the third quarter, slowing from a 1.7 percent pace of increase in the second quarter. That reflected a drop in hours for the self-employed.

Unit labor costs, the price of labor per single unit of output, rose at a 0.3 percent pace in the third quarter after increasing at a downwardly revised 3.9 percent rate in the second quarter.

Unit labor costs were previously reported to have increased at a 4.3 percent rate in the second quarter.

Third-quarter unit labor costs rose at a 2.3 percent rate compared to the same period of 2015. Hourly compensation per hour increased at a 3.4 percent rate in the third quarter after increasing at a 3.7 percent pace in the prior quarter. The strong quarterly increases suggest a pickup in wage growth. Hourly compensation rose at a 2.3 percent rate from a year ago.


U.S. services industry activity cooled in October amid a slowdown in new orders and hiring, suggesting a moderation in economic growth early in the fourth quarter.

Other data on Thursday showed planned job cuts by U.S.-based employers dropped 31 percent to a five-month low last month. That underscored the labor market’s healthy fundamentals, though more Americans filed for unemployment benefits last week.

The mixed reports came a day after the Federal Reserve offered a fairly upbeat assessment of the economy and signaled it could raise interest rates next month.

The Institute for Supply Management (ISM) said its non-manufacturing index fell 2.3 percentage points to a reading of 54.8 percent in October. A reading above 50 indicates expansion in the services sector, which accounts for more than two-thirds of the U.S. economy.

Services industries reported a moderation in new orders and employment, as well as demand for exports.

The new orders sub-index dropped 2.3 percentage points to 57.7, while a measure of services sector employment decreased 4.1 percentage points to 53.1. A sub-index for export orders fell 1.0 percentage point last month.

In another report, the Labor Department said nonfarm productivity, which measures hourly output per worker, rose at a 3.1 percent annual rate. The increase ended three straight quarters of decline. Productivity fell at a 0.2 percent rate in the second quarter.

Despite the rise, the trend in productivity remains weak.

Productivity was unchanged compared to the third quarter of 2015. Unit labor costs, the price of labor per single unit of output, rose at a 0.3 percent pace in the third quarter after increasing at a 3.9 percent rate in the second quarter.

Another report by the Commerce Department showed new orders for manufactured goods increased 0.3 percent in September after rising 0.4 percent gain in August. Unfilled orders at factories, however, fell for a fourth straight month.

Manufacturing, which accounts for about 12 percent of the economy, has been hurt by a strong dollar and weak global demand. Production has also been undermined by the collapse in oil drilling activity in the wake of the plunge in oil prices.

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