US jobless claims hit lowest level since February; productivity strongest in years

The number of Americans seeking jobless benefits for the first time fell unexpectedly last week to the lowest level since February, pointing to a U.S. job market that remains relatively tight even as other recent data indicate it has begun to soften.
Initial claims for state unemployment benefits fell 13,000 to 216,000 in the week ended Sept. 2 from a revised 229,000 in the prior week, the Labor Department said on Thursday. That was the lowest since the same level was touched in the week ended Feb. 11 and it marked the fourth straight weekly decline. Economists polled by Reuters had forecast new claims would rise to 234,000 in the latest week.
Meanwhile, the rolls of those continuing to receive jobless benefits beyond the first week fell by 40,000 to 1.679 million in the week ended Aug. 26 from a revised 1.719 million a week earlier. That was the lowest since the same level was hit in the week ended July 15.
Last week, the Labor Department said job growth picked up in August, although employment gains reported in the previous two months were revised sharply lower in an indication that labour market conditions were loosening. The unemployment rate rose unexpectedly to 3.8% from 3.5%, but that was driven by an increase in the labour force participation rate to the highest in more than three years.
Nonfarm productivity - measuring hourly output per worker - increased at a 3.5% annualized rate in the period from April through June - the highest since the third quarter of 2020 - versus a -1.2% reading in the first three months of the year. Second-quarter productivity had initially been estimated at 3.7%.
The report also showed labour costs, a key focus of the Federal Reserve as it battles to bring inflation back down to its 2% target, rose at a 2.2% annualized rate, a somewhat faster pace than the 1.6% rate initially reported. Nonetheless, the advance was still the slowest since the fourth quarter of 2022.

(Source: Reuters)