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US weekly claims rise modestly as workers produce less in Q2

Weekly jobless claims total 302,000

The number of Americans filing new claims for unemployment benefits rose a bit more than expected last week, but remained at levels consistent with tightening labor market conditions.

Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 302,000 for the week ended Aug. 30, the Labor Department said on Thursday. Claims for the prior week were unrevised.

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Economists polled by Reuters had forecast claims climbing to 300,000 last week. A Labor Department analyst said there were no special factors influencing the state level data.

The four-week average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, climbed 3,000 to 302,750.

Still, both claims and the four-week moving average continued to point to a strengthening jobs market.

The claims report has no bearing on August's employment report as it falls outside the survey period. The government is expected to report on Friday that nonfarm payrolls increased by 225,000 last month after rising by 209,000 in July, according to a Reuters survey.

That would be the seventh straight month that job gains have exceeded 200,000, a stretch last seen in 1997. The unemployment rate is expected to have declined one-tenth of a percentage point to 6.1 percent.

The jobless claims report showed the number of people still receiving benefits after an initial week of aid fell 64,0000 to 2.46 million in the week ended Aug. 23. That was the lowest level since June 2007.

Productivity dips, and so do labor costs

A career counselor reviews a document with information about finding jobs at the Western Addition Neighborhood Access Point in San Francisco.
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A separate report showed U.S. labor costs were far more weaker than previously thought in the second quarter, a government report showed on Thursday, which could give the Federal Reserve ammunition to maintain its accommodative monetary policy stance for a while.

The Labor Department said unit labor costs, the price of labor for any given unit of production, fell at a 0.1 percent annual rate instead of the 0.6 percent increase reported last month. Unit labor costs had increased at a rate of 11.6 percent in the first quarter.

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Compared to the second quarter of 2013, they rose 1.7 percent.

The Fed is keeping a close eye on wage growth as it ponders when to raise benchmark interest rates, which it has kept near zero since December 2008. Investors do not expect a rate increase until around the middle of next year.

The Labor Department also revised its initial estimate for productivity, to show it increasing at a 2.3 percent annual rate in the second quarter rather than the 2.5 percent pace reported last month.

By Reuters