New applications for US jobless benefits unexpectedly fell last week to the lowest level in more than 14 months, suggesting a labour market edging toward stability, while productivity was less robust in the third quarter. Initial claims for state unemployment aid slipped 5,000 to 457,000 from 462,000 in the prior week, the Labour Department said on Thursday.
-- Productivity gain in the 3rd quarter revised lower
Claims have dropped for five consecutive weeks. Analysts polled by Reuters had forecast claims rising to 480,000. The labour market is seen as the biggest threat to the economy's recovery from the worst recession since the 1930s. New filings for jobless aid are being watched for signs of when job losses might bottom and if the economic expansion that started in the third quarter can be sustained.
In another report, the department said third-quarter non-farm productivity rose at an 8.1 percent annual rate, still the quickest pace since the third quarter of 2003, rather than the 9.5 percent rate predicted last month. Aggressive cost cutting by businesses has pushed productivity sharply higher over the past months.
In sign that the battered labour market might be close to turning around, new applications for unemployment benefits have dropped significantly from March's high levels. However they are still above the 400,000 mark that analysts say would signal payrolls growth.
The four-week moving average for new claims fell to 481,250 last week, the lowest level since November last year and declining for the 13th straight week, Labour Department data showed. The four-week moving average is considered a better gauge of underlying trends as it irons out week-to-week volatility.
Government employment data on Friday is expected show that job losses moderated sharply in November and likely support views the deterioration in payrolls is in its final stages. Analysts polled by Reuters forecast US employers cut 130,000 jobs last month after reducing payrolls by 190,000 in October.
The unemployment rate is seen steady at a 26-1/2 year high of 10.2 percent. However, the data on Thursday showed the number of workers still collecting benefits after an initial week of aid rose 28,000 to 5.47 million in the week ended November 21, after declining for 10 straight weeks.
This was below market expectations for 5.48 million. So-called continuing claims are down from a peak of 6.9 million in June. The productivity report showed companies continue to cut hours worked to cope with sluggish demand. Hours worked fell at a 4.8 percent rate in the third quarter, the department said.
Unit labour costs, a gauge of inflation and profit pressures closely watched by the Federal Reserve, fell 2.5 percent, less than the 5.2 percent previously estimated. Unit labour costs were flat in the second quarter. They were previously estimated to have dropped 6.1 percent. Analysts had expected the fall in unit labour costs during the third quarter to be revised to show a 4.2 percent drop.