U.S. jobless claims rise; third-quarter productivity posts surprise gain
By Lucia Mutikani
WASHINGTON (Reuters) - New U.S. applications for unemployment benefits last week recorded their largest increase in eight months, but remained at levels consistent with a fairly healthy labor market.
Other data on Thursday showed a surprise rise in productivity in the third quarter after a drop in self-employment led to overall hours worked falling for the first time in six years, restraining labor-related production costs.
Initial claims for state unemployment benefits increased 16,000 to a seasonally adjusted 276,000 for the week ended Oct.31, the Labor Department said. It was the largest weekly increase since late February.
Still, last week marked the 35th straight week that claims were below the 300,000 threshold normally associated with a strong jobs market. Claims had hovered near 42-year lows for much of October.
"There is no evidence that there has been a pickup in involuntary job separations and we continue to expect an increase of 200,000 in private payrolls in October," said John Ryding, chief economist at RDQ Economics in New York.
The four-week moving average of claims, considered a better measure of labor market trends as it strips out week-to-week volatility, rose 3,500 to 262,750 last week.
Last week's claims report has no bearing on the October employment report due for release on Friday. According to a Reuters survey of economists, nonfarm payrolls rose 180,000 in October, well above the average gain of 139,000 jobs for August and September. The unemployment rate is forecast at 5.1 percent.
Solid payroll gains in October could seal the case for a December interest rate increase from the Federal Reserve. Continued...