A pedestrian walks past a “Help Wanted” sign on the door of a hardware store in Cambridge, Massachusetts, US, July 8, 2022. REUTERS/Brian Snyder/File Photo Obtaining licensing rights
Sep 7 (Reuters) – The number of Americans seeking unemployment benefits for the first time unexpectedly fell last week to the lowest level since February, suggesting that the US labor market remains relatively tight even as other recent data indicated it was beginning to ease. .
The Labor Department said Thursday that initial claims for state unemployment benefits fell by 13,000 to 216,000 in the week ending Sept. 2, from 229,000 in the previous week. This was the lowest level since the same level was touched in the week ending February 11th, and it marked the fourth consecutive weekly decline.
Economists polled by Reuters had forecast new claims rising to 234,000 in the latest week.
Meanwhile, the lists of those continuing to receive unemployment benefits after the first week fell by 40,000 to 1.679 million in the week ending Aug. 26 from a revised 1.719 million in the previous week. This was the lowest level since it reached the same level in the week ending July 15.
Continuing claims, which some economists have tracked as a proxy for employment, rose significantly from last year at this time until early April when they rose briefly above 1.85M. But since then, it has declined and remains low by historical standards.
Overall, the jobless claims numbers show that the US labor market does not appear to be at risk of volatility in the near term.
Last week, the Labor Department said job growth picked up in August, although employment gains recorded in the previous two months revised sharply in a sign that labor market conditions are improving. The unemployment rate unexpectedly rose to 3.8% from 3.5%, but that was helped by an increase in the labor force participation rate to the highest level in more than three years.
A separate report from the Labor Department showed that the rebound in worker productivity in the second quarter was not as strong as initially reported but still the strongest in nearly three years.
Nonfarm productivity – which measures hourly output per worker – rose at an annual rate of 3.5% in the April-June period – the highest level since the third quarter of 2020 – versus a reading of -1.2% in the first three months of the year. Second quarter productivity was initially estimated at 3.7%.
The report also showed that employment costs, a key focus for the Fed as it struggles to bring inflation down to its 2% target, rose at an annual rate of 2.2%, a somewhat faster pace than the 1.6% rate initially reported. However, progress remains the slowest since the fourth quarter of 2021.
Dan Burns reports. Editing by Chizuo Nomiyama and Paul Simao
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