The number of US workers filing new applications for unemployment insurance fell as expected last week, government data showed today, but the number of people still receiving benefits unexpectedly rose to its highest level in nearly two months.
Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 453,000 in the week ended May 29th, the Labor Department said.
Analysts polled by Reuters had expected claims to fall to 450,000 from the previously reported 460,000, which was slightly revised up to 463,000 in today's report.
The four-week moving average of new claims, considered a better measure of underlying labour market trends, rose 1,750 to 459,000.
A Labor Department official said there were no special factors affecting the report. The claims data has no impact on the government's closely watched employment report for May due today as it falls outside the survey period.
While other indicators support views the labor market recovery is firming, claims for jobless benefits remain above levels usually associated with sustainable employment growth.
The number of people still receiving benefits after an initial week of aid unexpectedly rose 31,000 to 4.67 million in the week ended May 22nd, the highest since early April, the Labor Department said. The level was above market expectations for 4.60 million.
The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, was unchanged at 3.6 percent for a seventh straight week.
US non-farm productivity growth was much slower than initially estimated in the first quarter, as businesses started adding workers to maintain output.
The Labor Department said non-farm productivity rose at a 2.8 per cent annual rate, instead of the previously reported 3.6 per cent pace. It was the smallest advance in a year, following a 6.3 per cent growth pace in the fourth quarter.
Analysts polled by Reuters had forecast productivity, which measures the hourly output per worker, rising at a 3.4 per cent rate in the January-March period.
Following a rapid expansion in the previous three quarters as businesses squeezed more output from a small group of workers, productivity is slowing down and analysts expect the trend to continue as companies increase payrolls.
Some companies have held off hiring new workers, opting instead to add hours for the existing workforce, but analysts believe this policy cannot be adopted indefinitely.
The economy grew at an annual pace of 3.0 per cent in the first quarter, slowing from a 5.6 per cent rate in the fourth quarter.
Total non-farm output grew at a 4.0 per cent rate in the January-March period, rather than the 4.4 per cent pace previously reported, after a robust 7.0 per cent pace in the fourth quarter, the Labor Department said.
Hours worked increased at a 1.1 per cent rate, instead of 0.8 per cent. The increase in hours was the highest since the second quarter of 2007 and marked an acceleration from the 0.7 per cent pace in the fourth quarter.
Reuters