- Sal Guatieri, a senior economist in Toronto at BMO Capital Markets
US jobless claims unexpectedly rose last week, recording their largest increase in eight months, but remained at levels associated with a healthy labour market. Initial claims for state unemployment benefits surged 16,000 to a seasonally adjusted 276,000 for the week ended Oct. 31, the Labor Department said. It was the largest weekly gain since late February. Yet, it was the 35th consecutive week that claims were below the 300,000 threshold, which is normally consistent with a strong jobs market. Claims had hovered near 42-year lows for much of October. The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, climbed 3,500 to 262,750 last week.
Meanwhile, the productivity of workers on non-farm payrolls rose at an annual rate of 1.6% in the third quarter, whereas the markets had expected a 0.4% drop. This was the second consecutive increase, as worker efficiency had jumped 3.5% in the previous three-month period. Nevertheless, productivity growth has been subdued in recent years, which is why many economists believe a shortage of workers will soon put upward pressure on inflation.
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