The number of Americans filing first-time claims for jobless benefits took an unexpectedly sharp plunge last week to a level not seen since before the economy tumbled into recession in 2001, a report showed today.
A separate report showed US business productivity soared in the third quarter, suggesting little risk inflation will flare despite signs the economic recovery is on firmer ground.
Initial claims for state unemployment aid fell 43,000 to 348,000 in the week to November 1st, the lowest level since late January 2001, two months before the recession began A government spokesman said he could not account for the big drop in claims last week, but said problems with seasonal adjustment of the data could be a factor.
"Every week we encourage (looking at) the four-week average. This is certainly one of those weeks," he said.
The four-week average, which smoothes weekly volatility to present a clearer picture of labour-market trends, fell 10,000 to 380,000 last week, its lowest level since March 2001.
Last week, the government reported that the US economy grew at an annual rate of 7.2 per cent in the third quarter, the strongest pace in nearly two decades.
Despite that, the economy shed 41,000 jobs as gains in productivity enabled firms to meet increased demand for goods and services without expanding their workforce.
Productivity climbed at an 8.1 per cent annual rate in the third quarter, accelerating from an upwardly revised 7 per cent gain in the prior three months.
The increase reflected a rise in output that was the strongest in over 10 years, and only a small increase in the number of hours workers put in on the job.
The productivity gain pushed unit labour costs - a gauge of potential wage pressures - down at a 4.6 per cent pace, suggesting a good quarterly performance for corporate profit.
Analysts say the recent productivity pace is unsustainably strong, and some said the fall in jobless claims suggested firms were finally having to hire to meet demand.
On Friday, the department releases its employment report for October. Financial market economists are looking for US payrolls to rise 55,000 after a 57,000 gain in September.
They expect the jobless rate to hold steady at 6.1 per ent.