A now hiring sign in Somerville, Mass., on Sept. 1, 2022.BRIAN SNYDER/Reuters
The number of Americans seeking jobless benefits for the first time fell unexpectedly last week to the lowest level since February, pointing to a U.S. job market that remains relatively tight even as other recent data indicate it has begun to soften.
Initial claims for state unemployment benefits fell 13,000 to 216,000 in the week ended Sept. 2 from a revised 229,000 in the prior week, the Labor Department said on Thursday. That was the lowest since the same level was touched in the week ended Feb. 11 and it marked the fourth straight weekly decline.
Economists polled by Reuters had forecast new claims would rise to 234,000 in the latest week.
Meanwhile, the rolls of those continuing to receive jobless benefits beyond the first week fell by 40,000 to 1.679 million in the week ended Aug. 26 from a revised 1.719 million a week earlier. That was the lowest since the same level was hit in the week ended July 15.
Continued claims, followed by some economists as a proxy for hiring, had climbed notably from last year at this time through early April when they briefly rose above 1.85 million. Since then, however, they have declined and remain low by historical standards.
Overall, the jobless claims figures show the U.S. job market appears in no danger of rolling over in the near term.
Last week, the Labor Department said job growth picked up in August, although employment gains reported in the previous two months were revised sharply lower in an indication that labour market conditions were loosening. The unemployment rate rose unexpectedly to 3.8 per cent from 3.5 per cent, but that was driven by an increase in the labour force participation rate to the highest in more than three years.
A separate report from the Labor Department showed the rebound in worker productivity in the second quarter was not as strong as initially reported but was still the strongest in nearly three years.
Nonfarm productivity – measuring hourly output per worker – increased at a 3.5 per cent annualized rate in the period from April through June – the highest since the third quarter of 2020 – versus a –1.2 per cent reading in the first three months of the year. Second-quarter productivity had initially been estimated at 3.7 per cent.
The report also showed labour costs, a key focus of the Federal Reserve as it battles to bring inflation back down to its 2 per cent target, rose at a 2.2 per cent annualized rate, a somewhat faster pace than the 1.6 per cent rate initially reported. Nonetheless, the advance was still the slowest since the fourth quarter of 2022.