U.S. Initial Jobless Claims Unexpectedly Rise
Further, while two weeks is not nearly enough to demonstrate a trend reversal, the initial jobless claims stat, when combined with increases in both the four-week moving average (by 11,750 to 468,750) and in continuing claims (by 2,000 to 4.602 million), raises questions about when jobs will clearly recover.A year ago, initial jobless claims totaled 624,000, continuing claims totaled 4.75 million and the four-week moving average was 581,000.
Productivity Rises Again
Separately, U.S. worker productivity continued to increase at an impressive rate, rising at a 6.2% annualized rate in fourth-quarter 2009 and increasing 5.1% for all of 2009, the Labor Department said. Productivity increased 7.2% in the third quarter. Further, unit labor costs fell 4.4% in the fourth quarter and 2.8% for all of 2009 -- the largest four-quarter cost decline since the 2001. A Bloomberg News survey had expected the quarter's productivity to increase 7% and unit labor costs to fall 3.8%.
Returning to initial jobless claims, the largest increases for the week ending Jan. 23, the latest week for which data are available, were in Oregon, at 4,336; Puerto Rico, at 2,439; and Hawaii, 18. The largest decreases were in California, -22,674; Michigan, -11,757; North Carolina, -9,546; Georgia, -7,588; and Missouri, -7,577.
Also, the highest insured unemployment rates for the week ending Jan. 16, the latest week for which data are available, were in Alaska, 7.3%; Oregon, 6.6%; Pennsylvania, 6.5%; Idaho, 6.4%; Wisconsin, 6.3%; Montana, 6.2%; Michigan, 6%; Nevada, 5.7%; Connecticut, 5.3%; North Carolina, 5.3%; and Washington state, 5.3%.
With Luck, Just a Temporary Rise
The jobless claims rise was a surprise, but investors should note the underlying data, which suggest the rise may be an anomaly or temporary. The reason? The states/territories with the highest increases in jobless claims are few -- only three (Oregon, Puerto Rico, Hawaii), and the totals aren't that high. Typically, when jobless claims trend higher, you'll see many states with substantial increases. The reverse is true in the current report, and that suggests this week's initial jobless claims rise is probably temporary.
Productivity, however is unambiguous: The remarkable U.S. worker productivity story continues. Critics will counter that much of the productivity gain is due to layoffs. But the bottom line is that despite the recession, U.S. companies have become even more productive - - lowering their cost per unit produced -- and U.S. worker output continues to increase in real terms.
Historically, rising worker productivity has meant good things for corporate earnings, for U.S. corporate competitiveness and, ultimately, for real U.S. incomes. To be sure, this is a new era -- globalization and automation complicate the wage gain equation -- but that still doesn't blot out the positive trend/story of more-productive U.S. workers.