MNI DATA ANALYSIS: US Jobless Claims Fell 5,000 To 229,000>

--Four-Week Moving Average -7,250 To 232,500, Low Since April 1973

--3Q Nonfarm Productivity Rise 3.0%, Unit Labor Costs Up 0.5%.

By Kevin Kastner, Sara Haire and Holly Stokes

     WASHINGTON (MNI) - Initial claims U.S. state unemployment benefits 

fell by 5,000 to 229,000 in the October 28 week, well below the 235,000 

level expected and driving the four-week average to a 44-year low, data 

released by the Labor Department Thursday showed. 

     Also released Thursday, third quarter nonfarm productivity was up 

3.0%, slightly ahead of the 2.9% gain expected and the largest increase 

since the third quarter of 2014. Unit labor costs were up 0.5%, a 

smaller gain than the 0.6% rise expected. Revisions to second quarter 

data were very minor, with productivity still up 1.5% and unit labor 

costs now up 0.3%, so the report was basically as expected. 

     The four-week moving average for initial claims, a better measure 

of the underlying trend of the data, fell by 7,250 to 232,500 in the 

October 28 week as the 258,000 level in the September 30 week rolled out 

of the equation. This marks the lowest point for the average since the 

April 7, 1973 week and confirms that claims have returned to their 

pre-hurricane levels. 

     The Labor Department reported that backlogged filings in Puerto 

Rico have started to be processed, but are still held up in the Virgin 

Islands. Unadjusted claims in Puerto Rico rose by 78% to 6,129 in the 

current week. 

     If the number of headline claims does not change next week and 

there are no revisions to data from the past four weeks, the four-week 

average will fall by 3,750 as the 244,000 level in the October 7 week 

rolls out of the calculation, which would break through to another low. 

     Seasonal adjustment factors had expected an increase of 2.1%, or 

4,444, in unadjusted claims. Instead, unadjusted claims rose by only 86 

to 215,757. The current week's level is well below the 245,751 level in 

the comparable week a year ago. 

     The level of continuing claims fell by 15,000 to 1.884 million in 

the October 21 week, the lowest level since the December 29, 1973 week. 

Unadjusted continuing claims rose by 3,705 to 1.607 million in the week, 

still well below the 1.742 million level a year earlier. The four-week 

moving average for continuing claims fell by 9,250 to 1.896 million, the 

lowest level since the January 12, 1974 week. 

     The seasonally adjusted insured unemployment rate fell to 1.3% in 

the October 21 week from 1.4% in the previous week. The current week's 

rate is down from 1.5% in the same week a year earlier. 

     The unemployment rate among the insured labor force is well below 

that reported monthly by the Labor Department because claims are 

approved for the most part only for job losers, not the job leavers and 

labor force reentrants included in the monthly report. 

     Third quarter output rose at a 3.8% rate, compared with the 3.9% 

rate now reported for the previous quarter. Hours worked rose only 0.8% 

in the third quarter after 2.4% in the second quarter. 

     Compensation rose 3.5% in the third quarter after an unrevised 1.8% 

gain in the second quarter, and was up 1.5% after inflation 

adjustment. Real compensation rose 2.1% in the second quarter. 

     The year/year pace of productivity growth accelerated modestly to 

1.5% in the third quarter from 1.3% in the second quarter, reaching its 

highest point since the second quarter of 2015. Unit labor costs now 

stand 0.1% lower than they were a year ago, a slight improvement from 

the 0.2% year/year rate of decline in the second quarter, but an 

indication that labor cost inflation has slowed. 

     ** MNI Washington Bureau: 202-371-2121 ** 

[TOPICS: MAUDS$,M$U$$$,MAUDR$]