- Gennadiy Goldberg, an economist at TD Securities
The number of Americans applying for unemployment benefits increased more than expected last week, signalling some loss of momentum in the labour market due to a steep economic slowdown and stock market rout. Initial claims for state unemployment benefits surged 8,000 to a seasonally adjusted 285,000 for the week ended January 30, the Labor Department reported. The prior week's claims were revised to show 1,000 fewer applications received than previously reported. Despite the increase last week, claims remained below 300,000, a level associated with strong labour market conditions, for the 48th straight week. That is the longest run since the early 1970s. The four-week moving average of claims, considered a better measure of labour market trends as it strips out week-to-week volatility, rose 2,000 to 284,750 last week. The data came ahead of the government's more comprehensive report on Friday. Economists predict that the report will show employers added 200,000 jobs and the jobless rate remained at 5.0%.
Meanwhile, productivity of US employees declined at the sharpest pace in almost two years toward the end of last year. Output per hour fell at an annualized rate of 3% in the fourth quarter, compared to a 2% plunge expected by the markets, and following a 2.1% increase in the third trimester.
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