Jobless claims edge up slightly
At 1.5% growth, it was a lukewarm summer for U.S economy
WASHINGTON — More Americans applied for unemployment benefits last week, but levels remain near historic lows as employers are hesitant to let go of workers.
The Labor Department said Thursday that a seasonally adjusted 276,000 people sought unemployment aid last week, up from 260,000 in the prior week. The fourweek average, a less volatile measure, rose 3,500 to 262,750.
Employers intent on ensuring skilled workers remain on their payrolls have been holding the line on dismissals, making adjustments to hiring plans instead in response to the slowdown in overseas economies.
“We’re still at very healthy levels,” said Thomas Costerg, senior U.S. economist at Standard Chartered Bank in New York. “Jobless claims suggest the labor market is quite close to full employment.”
Joblessness claims are a proxy for layoffs. Recent multidecade lows indicate that employers expect the economy to continue to improve despite global pressures on growth, prompting them to hold onto workers. The four-week average has stayed below 300,000 since late March, achieving levels traditionally linked with a healthy job market.
The government releases the October jobs report today. Economists surveyed by FactSet expect that employers added a net 182,000 jobs last month. This would follow a sharp slowdown in hiring in September and August, when hiring averaged just 139,000 jobs, a sharp slowdown from gains earlier in the year that routinely exceeded 200,000.
The strong dollar and weak economic growth abroad have
weighed on the U.S. economy since August. U.S. factory output has also dropped because lower energy costs have led oil and gas drilling companies to reduce their spending on machinery and equipment.
As a result, the economy grew at a tepid annual rate of just 1.5 percent over the summer, the Commerce Department said last week, down from a much healthier pace of 3.9 percent in the April-June period.
But the slowdown in growth and hiring has yet to correspond with an increase in layoffs, a sign that employers expect the economy to strengthen in the coming months.
U.S. productivity slowed in the summer, while labor costs rebounded yet stayed at a level suggesting only modest inflation pressures.
Productivity rose at an annual rate of 1.6 percent in the July-September quarter, a slowdown from a 3.5 percent increase in the second quarter, the Labor Department said Thursday. Labor costs rose at a modest annual rate of 1.4 percent in the third quarter after having fallen at a 1.8 percent pace in the second quarter.
Productivity, the amount of output per hour of work, has slowed significantly in recent years. Economists are divided on the causes for the weakness. Over the past year, productivity is up just 0.4 percent compared with average annual growth of 2.2 percent from 1947 through 2014.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said that the productivity gain for the third quarter was much better than expected but described the long-term trend as disappointing.
“All we can say for sure is the productivity growth is very slow, showing no sustained signs of revival,” Shepherdson said.
Productivity jumped for a decade starting in 1995, gains that were attributed to improvements in computer software and the introduction of a number of high-tech products that helped workers do their jobs more efficiently. But in recent years, productivity growth has slowed significantly.
Some economists believe that reflects a temporary drop in business investment in new equipment, and they forecast a rebound in productivity growth to higher levels. However, other analysts worry that the country could be stuck in a prolonged period of weak productivity growth.
Information for this article was contributed by Josh Boak and Martin Crutsinger of The Associated Press and by Victoria Stilwell of Bloomberg News.