New claims for US unemployment benefits fell last week, but were still too high to signal a change in fortune for the troubled labour market.
Also underscoring the sputtering economic recovery was a separate government report on Thursday showing non-farm productivity fell more steeply than previously estimated in the second quarter, posting its largest decline since the third quarter of 2006.
Initial claims for state unemployment benefits dropped for a second straight week, slipping 6,000 to a seasonally adjusted 472,000 in the week ended August 28, according to data from the Labour department. Analysts polled by Reuters had forecast claims edging up to 475,000.
"We're still uncomfortably high, given where we are at this juncture of the recovery, but that we're moving towards 400,000 rather than 500,000 is indicative of at least some measure of job creation," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
US stock index futures edged higher on the claims data, while Treasury debt prices extended losses. The US dollar was little changed.
Productivity -- a measure of hourly output per worker that is taken as an indicator of the economy's vitality or lack of it -- contracted at an annual rate of 1.8%, instead of the previously reported 0.9% pace. Analysts had expected productivity to drop at a 1.9% pace in the April-June period after increasing at a 3.9% rate the first quarter.
Unit labour costs, a gauge of potential inflation pressures closely watched by the Federal Reserve, rose at a 1.1% rate rather than the previously estimated 0.2%. The increase in unit labour costs was the fastest rate since the fourth quarter of 2008. Unit labour costs fell at 4.6% rate in the first three months this year.
Comments