U.S. Weekly Jobless Claims Rise; Productivity Plunges At Fastest Pace In 74 Years

• New claims for U.S. unemployment benefits increased to a more than two-month high last week but remained at a level consistent with tightening labour market conditions and further wage gains that could keep inflation hot for a while. 
• The report from the Labour Department on Thursday also showed the number of Americans collecting state unemployment checks was the smallest in more than 52 years towards the end of April. Economists brushed off last week's increase in initial claims, arguing that the data are volatile around moving holidays like Easter, Passover, and school spring breaks. 
• Initial claims for state unemployment benefits rose 19,000 to a seasonally adjusted 200,000 for the week ended April 30, the highest since mid-February. Economists polled by Reuters had forecast 182,000 applications for the latest week. Claims at 200,000 are viewed as consistent with strong demand for workers. They have declined from a record high of 6.137 million in early April 2020. 
• Further, government data this week showed there were a record 11.5 million job openings on the last day of March, which widened the jobs-workers gap to a record 3.4% of the labour force from 3.1% in February. The labour market imbalance is forcing employers to increase wages, contributing to soaring inflation. 
• Rising labour costs showed that worker productivity plummeted at its sharpest pace in more than 74 years in the first quarter, suggesting that the Fed cannot, for now, rely on workers being more productive to rein in inflation.

(Source: Reuters)