US jobless claims near 44-1/2-year low

[WASHINGTON]The number of Americans filing for unemployment benefits fell to a near 44-1/2-year low last week, supporting expectations of a sharp rebound in job growth in October after employment was depressed by hurricane-related disruptions in September.

Other data on Thursday showed worker productivity increased at its fastest pace in three years in the third quarter. A tightening labor market and improving productivity likely strengthen the case for the Federal Reserve raising interest rates in December, despite wage pressures remaining tame.

Initial claims for state unemployment benefits decreased 5,000 to a seasonally adjusted 229,000 for the week ended Oct 28, the Labour Department said. That was not too far from 223,000, a 44-1/2-year low touched in mid-October. Economists had forecast claims rising to 235,000 in the latest week.

Claims have dropped from an almost three-year high of 298,000 hit at the start of September in the aftermath of Hurricanes Harvey and Irma, which ravaged parts of Texas and Florida. Harvey and Irma have largely dropped out of the data for the mainland United States.

The Labor Department, however, said claims-taking procedures continued to be severely disrupted in the Virgin Islands. The situation in Puerto Rico had improved and backlogs were now being processed, the department said.

Irma and hurricane Maria destroyed infrastructure, virtually cutting off communication with the islands.

Last week marked the 139th straight week that claims remained below the 300,000 threshold, which is associated with a strong labor market. That is the longest such stretch since 1970, when the labor market was smaller.

The labor market is near full employment, with the jobless rate at a more than 16-1/2-year low of 4.2 percent.

The dollar rose slightly against a basket of currencies after the data, while prices for U.S. Treasuries were little changed. The Fed kept interest rates unchanged on Wednesday.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, dropped 7,250 to 232,500 last week.

That was the lowest reading since April 1973.

REUTERS