US weekly jobless claims at nine-month low; productivity rebounds

[WASHINGTON] The number of Americans filing for unemployment benefits dropped to a nine-month low last week, suggesting a tightening labour market would continue keep the longest economic expansion in history on track.

The economy is, however, likely to remain on a moderate growth path, with other data on Thursday showing worker productivity rebounding less than expected in the fourth quarter.

Sluggish productivity is one of the reasons the economy has struggled to achieve the Trump administration's target of 3 per cent annual growth. The economy grew 2.3 per cent in 2019, the slowest in three years, after logging 2.9 per cent in 2018.

Initial claims for state unemployment benefits decreased 15,000 to a seasonally adjusted 202,000 for the week ended Feb 1, the lowest reading since last April, the Labour Department said. Economists polled by Reuters had forecast claims dipping to 215,000 in the latest week.

The Labour Department said only claims for Alabama and Pennsylvania were estimated last week.

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 3,000 to 211,750 last week, also the lowest level since last April.

The claims data has no bearing on January's employment report, which is scheduled for release on Friday, as it falls outside the survey period. Claims were lower in January relative to December, suggesting a pick-up in job growth.

According to a Reuters survey of economists, nonfarm payrolls likely increased by 160,000 jobs in January after rising 145,000 in December.

Employment gains could, however, exceed expectations given unseasonably mild weather, which could have boosted hiring at construction sites and in the leisure and hospitality industry.

The ADP National Employment report on Wednesday showed private payrolls surged by 291,000 jobs in January, the most since May 2015, after increasing 199,000 in December.

REUTERS