Jobless Claims Rise, But Labor Market Remains Healthy
After months of historic records of employment data in the United States, the labor market noted a bit of bad news on Thursday as new applications for unemployment benefits last week recorded their largest increase in eight months, according to government statistics.
But the U.S. Department of Labor data still suggest a largely healthy labor market and also showed a surprise rise in productivity in the third quarter, Reuters detailed. Manufacturing productivity grew at its fastest pace in four years and helped defy the predictions of leading economists who had expected productivity to contract at a 0.2 percent rate between July and September, the newswire added.
The rise in applications for unemployment benefits, which increased 16,000 to a seasonally adjusted 276,000 for the week ended Oct. 31, meanwhile, is due to a drop in self-employment that also led to overall hours worked falling for the first time in six years. But John Ryding, the chief economist at RDQ Economics in New York, remained positive about the overall labor market.
"There is no evidence that there has been a pickup in involuntary job separations," he told Reuters. "We continue to expect an increase of 200,000 in private payrolls in October."
"We're still at very healthy levels," Thomas Costerg, a senior U.S. economist at Standard Chartered Bank in New York, agreed, according to Bloomberg.
Claims had been trending downward since 2009 and had recently come close to a four-decade low, the Wall Street Journal recalled. In general, thus, employers have been reluctant to lay off workers, suggesting a tightening of the labor market, the newspaper explained.
At the same time, however, hiring has slowed in recent months, and the divergence between the trends in jobless claims and employment has puzzled economists such as Ian Shepherdson, the chief economist at Pantheon Macroeconomics, according to the New York-based publication.
"We just don't know if the payroll slowdown is real," Shepherdson said. "All we know for sure is that the pace of layoffs is extraordinarily low."
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