Fed Ying and Yang
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DJ US Jobless Claims -19K To 318K In Sep 1 Wk; Survey -4K
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By Brian Blackstone
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The number of U.S. workers filing new claims for jobless benefits tumbled last week, matching its biggest drop in almost seven months, easing worries about labor market conditions in the wake of recent housing and financial market woes.
Jobless claims slid 19,000 to 318,000 on a seasonally-adjusted basis in the week ended Sept. 1, the Labor Department said Thursday. The last time claims fell more was in the Feb. 17 week. They also fell 19,000 in late April. Claims for the Aug. 25 week were revised to 337,000 from 334,000.
There were no special factors in the latest week, a Labor Department analyst said.
Wall Street forecasts had called for only a 4,000 decline last week to 330,000, according to a Dow Jones Newswires survey.
Still, the four-week average - which economists use to gauge underlying labor market trends - rose by 500 last week to 325,750. That's the fifth-straight increase.
Investors are closely watching U.S. labor markets amid worries over credit availability triggered by problems in the mortgage market. Federal Reserve Chairman Ben Bernanke said last week that the Fed will eye the timeliest data to gauge whether financial market volatility is affecting the broader economy. Jobless claims are the most up-to-date indicator the government publishes, giving them a higher profile than usual.
Nonfarm payrolls expanded by just 92,000 in July and the unemployment rate ticked up, though it remains low by historical standards. The government releases August figures Friday. Many economists are bracing for another weak report following an estimate released Wednesday by ADP and Macroeconomic Advisers that signaled only 38,000 new private-sector jobs were created last month.
If labor markets and, in turn, consumption head lower it would intensify pressure on Federal Reserve officials to cut their main policy tool, the federal funds rate. Futures markets are pricing in multiple reductions in the fed funds rate starting this month to alleviate credit crunch worries and their potential economic effects. The Fed has already lowered the discount rate is charges banks that borrow directly from the Fed.
According to the Labor Department report Thursday, continuing claims for workers drawing unemployment benefits for more than a week rose 25,000 to 2,598,000 in the week ended Aug. 25, the latest week for which such data are available. That's the highest since mid February.
The insured unemployment rate was 2.0% in the Aug. 25 week, up 0.1 percentage point from the previous week, which was revised lower.
There were 33 states and territories reporting an increase in initial jobless claims for the Aug. 25 week, while 20 reported a decrease.
North Carolina had the biggest decrease, 2,125, thanks to fewer layoffs in trade, transportation equipment, textile and furniture industries. New York reported the sharpest increase, 3,181, due to layoffs in transportation and services industries.
-By Brian Blackstone; Dow Jones Newswires; 202-828-3397; brian.blackstone@dowjones.com
(END) Dow Jones Newswires
September 06, 2007 08:30 ET (12:30 GMT)
Copyright (c) 2007 Dow Jones & Company, Inc.- - 08 30 AM EDT 09-06-07
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Productivity Grows at Faster Pace
Thursday September 6, 8:35 am ET
By Martin Crutsinger, AP Economics Writer
Productivity Rebounds Strongly and Wage Pressures Ease
WASHINGTON (AP) -- Worker productivity rebounded, growing at the fastest pace in nearly two years in the spring while wage pressures eased sharply, developments that should reduce concerns about inflation.
The Labor Department reported Thursday that productivity, the amount of output per hour of work, jumped to an annual growth rate of 2.6 percent in the April-June quarter, even better than the 1.8 percent increase that was originally reported.
Wage pressures, as measured by unit labor costs, slowed to an annual growth rate of 1.4 percent in the spring, slower than the initial estimate that labor costs were rising at a 2.1 percent rate.
Rising wages are good for workers, but if those gains are not accompanied by increased productivity, they can trigger unwanted inflation. If productivity is growing, it allows businesses to pay their workers more out of the increased output rather than by raising prices. |
