US initial jobless claims pick up, still near pre-Covid levels
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INITIAL applications for US unemployment benefits picked up last week but remained relatively subdued.
New claims increased by 11,000 to 219,000 in the week ended Feb 1. The median forecast in a Bloomberg survey of economists called for 213,000 applications.
The level of initial claims remain generally in line with pre-Covid levels, and private employment data from ADP Research showed a healthy pace of hiring in January. That’s consistent with a labour market that Federal Reserve chair Jerome Powell described last week as “pretty stable”.
The four-week moving average of new applications, a metric that helps smooth out fluctuations, ticked up to 216,750, only the highest in a month.
Before adjusting for seasonal factors, initial claims also rose, led by California and New York.
Continuing claims, a proxy for the number of people receiving benefits, rose to 1.89 million in the week ended Jan 25, according to Labor Department data released on Thursday (Feb 6).
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A separate report showed that labour productivity advanced at a firm pace in the fourth quarter, capping another year marked by efficiency gains that propelled economic growth.
US-based employers announced almost 50,000 cuts in January, the lowest count for the first month of the year since 2022, which itself was a record low, according to outplacement firm Challenger, Gray & Christmas.
The numbers may pick up this month. Over the past week, several high-profile companies have said they planned to reduce their staff, including Workday, General Motors and Estee Lauder Cos.
“January was relatively quiet in terms of job cut announcements. However, we have already seen major announcements in the early days of February, so it seems this quiet is unlikely to last,” Andrew Challenger, senior vice-president of Challenger, Gray & Christmas, said. BLOOMBERG
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