Fewer Americans filed applications for first time jobless benefits last week, according to the Labor Department in its weekly report from Washington, keeping claims near five-year lows and signaling the ongoing recovery of the nation’s labor market.
Claims for initial unemployment benefits, a measure of layoffs, dropped by 5,000 to a seasonally adjusted 366,000 for the week ended February 2, said the agency. The four-week moving average, generally considered a more reliable gauge of labor trends because it eliminates weekly volatility, declined by 2,250 to 350,500. That’s the lowest level since March 2008.
Economists were expecting new claims to tally 360,000 for the past week.
Meanwhile, the previous week’s estimate of 368,000 claims was upwardly revised to 371,000 new applications. Volatility throughout January is common each year due to seasonal hiring and firing.
With the holiday season behind us, the labor market looks to be on about the same pace as this time in 2012. The Labor Department said that no states were estimated and that there was nothing unusual in the latest report.
Continuing claims, or those people that have already been receiving benefits, increased by 8,000 to 3.22 million for the week ended January 26. Continuing claims are reported at a two-week lag.
In a separate report, the Labor Department said that its first estimate of the fourth quarter of 2012 showed that workers logged more hours, but productivity dropped by a 2.0 percent annual rate. This follows an increase in productivity of 3.2 percent in the third quarter and represents the steepest quarterly decline in nearly two years.
Economists were expected a 1.5 percent decline in productivity given the 0.1 percent contraction in gross domestic product that was reported last week for the October to December quarter.
For the complete year 2012, productivity increased by 1.0 percent, outpacing the 0.7 percent clip for 2011, although far behind the 3.1 percent increase during 2010 and lower than the 1.9 percent average annual growth rate from the past four decades. It’s notable that the productivity figure will still be revised two more times, once in March and again in April, and has been known to undergo some hefty revisions.
The Dow Jones and S&P 500 feel like they are hanging by a thread to try and take out all-time highs that are within reach. Early in the trading session, the Dow is off by 34 points, the S&P 500 lower by 2 points and the Nasdaq has shaved away 4 points and investors look for the catalyst to hit new highs and didn’t get it with today’s info from the Labor Department. Wednesday started similarly, however, with stocks lower in the morning before a small surge boosted the benchmark indices off lows.