US weekly jobless claims continue to decline; productivity rebounds in the fourth quarter

People line up outside a newly reopened career center for in-person appointments in Louisville, U.S., April 15, 2021. REUTERS/Amira Karaoud

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  • Weekly jobless claims fall from 23,000 to 238,000
  • Continuing claims drop 44,000 to 1.628 million
  • Productivity rebounds 6.6% in the fourth quarter

WASHINGTON, Feb 3 (Reuters) – The number of Americans filing new claims for unemployment benefits fell more than expected last week as COVID-19 infections declined, suggesting that an expected slowdown in the Job growth in January was likely temporary.

The second consecutive weekly decline reported by the Labor Department on Thursday partially reversed the recent surge, which had propelled initial claims to a three-month high in mid-January.

“The Omicron COVID-19 variant’s grip on the U.S. labor market is loosening and job growth is expected to reaccelerate,” said Ryan Sweet, senior economist at Moody’s Analytics in West Chester, Pennsylvania.

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Initial claims for state unemployment benefits fell from 23,000 to a seasonally adjusted 238,000 for the week ended Jan. 29. Economists polled by Reuters had forecast 245,000 claims for the past week.

Applications fell sharply in Ohio, Kentucky and Illinois, offsetting notable increases in Michigan, California, Indiana and Pennsylvania.

Claims spiked from early January to mid-month amid an onslaught of coronavirus infections, driven by the Omicron variant. Business activity, particularly in the service sector, has been impacted by the latest wave.

The ADP’s National Jobs Report released on Wednesday showed private sector payrolls fell in January for the first time in a year, raising a strong possibility that the overall economy will shed jobs this month. last. Read more

According to the Census Bureau’s Household Pulse Survey released in mid-January, 8.8 million people reported not being at work for coronavirus-related reasons between Dec. 29 and Jan. 10.

People who are sick or quarantined and not paid during the payroll survey period are counted as unemployed in the Department of Labor’s establishment survey, even if they still have a job at their company. .

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The government is expected to report on Friday that nonfarm payrolls rose by 150,000 jobs last month after rising by 199,000 in December, according to a Reuters survey of economists. Estimates range from a decrease of 400,000 to a gain of 385,000. The unemployment rate is expected to remain unchanged at 3.9%, underscoring tighter labor market conditions.

There were 10.9 million job openings at the end of December. The workforce is about 2 million fewer than before the pandemic. Claims fell from a record high of 6.149 million at the start of April 2020.

The recent labor market turmoil is likely over and employment growth will likely resume. The United States is reporting an average of 433,601 new COVID-19 infections per day, down sharply from more than 700,000 in mid-January, according to a Reuters analysis of official data.

The claims report also showed the number of people receiving benefits after an initial week of help fell by 44,000 to 1.628 million in the week ending January 22.

A total of 2.068 million people were receiving unemployment checks under all programs as of mid-January.

“The sharp decline in initial claims over the past two weeks and the continued decline in continuing claims indicate that job growth should rebound in February,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. .

“The biggest constraint to hiring in the spring of 2022 will be the labor shortage.”

The underlying strength of the labor market was underscored by a separate report released Thursday by global outplacement firm Challenger, Gray & Christmas showing that job cuts announced by US-based employers held steady at 19,064 in January. Layoffs are down 76% from January 2021.

A third report from the Labor Department showed that nonfarm productivity, which measures hourly output per worker, rebounded at an annualized rate of 6.6% in the last quarter after falling to a rate of 5.0% in the third. trimester. Economists expected productivity to rebound at a rate of 3.2%. Productivity has been volatile since the start of the pandemic in the United States two years ago.

Compared to the fourth quarter of 2020, productivity increased at a rate of 2.0%. Productivity increased by 1.9% in 2021, compared to 2.4% in 2020. find out more

“We’re seeing productivity gains remain positive as production continues to expand with fewer workers,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York. “The adoption of new technologies during the pandemic will also likely provide a boost over time. But the gains may slow as more low-productivity jobs are reclaimed.”

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Reporting by Lucia Mutikani Editing by Chizu Nomiyama

Our standards: The Thomson Reuters Trust Principles.

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