REPEAT: MNI DATA ANALYSIS: US Jobless Claims Drop 1,000>

Repeats Story Initially Transmitted at 13:30 GMT Feb 1/08:30 EST Feb 1

--Four-Week Moving Average Fell 5,000 to 234,500; Could Fall Next Week

--Fourth Quarter Nonfarm Productivity Surprise -0.1%, Labor Costs +2.0% 

By Kevin Kastner, Sara Haire and Holly Stokes 

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

fell by 1,000 in the January 27 week to 230,000, when analysts had 

expected claims to actually rise modestly to 238,000, data released by 

the Labor Department Thursday showed. 

     Seasonal adjustment factors had expected an increase of 3.4%, or 

8,792 in unadjusted claims. Unadjusted claims actually rose by 7,604 to 

267,674, but the current week's level was still well below the 280,983 

level a year ago. 

--FOUR-WEEK AVERAGE DIPS FURTHER     

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

of the underlying trend of the data during periods of volatility, fell 

by 5,000 to 234,500 in the January 27 week as the 250,000 level in the 

December 30 week rolled out of the equation. 

     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 7,750 as the recent peak 261,000 level in the 

January 6 week rolls out of the calculation. 

--CONTINUING CLAIMS REMAIN LOW

     The level of seasonally adjusted continuing claims rose by 13,000 

to 1.953 million in the January 20 week after dipping to 1.940 million in 

the previous week, but the level is still significantly lower than a 

year earlier. 

     The four-week moving average for continuing claims rose by 12,000 

to 1.933 million in the January 20 week, as a 1.905 million level in the 

December 23 week dropped out. 

     It is likely the average will rise further in next week's data, as 

the extremely low 1.873 million level in the December 30 holiday week 

will no longer be in the calculation. 

     Unadjusted continuing claims rose by 85,441 to 2.373 million in the 

week, but remained below the 2.495 million level a year earlier. 

     The seasonally adjusted insured unemployment rate held steady at 

1.4%, down slightly 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. 

--NON-FARM PRODUCTIVITY FALLS

     Nonfarm productivity fell 0.1% in the preliminary estimate for the 

fourth quarter, compared with expectations for a 0.7% gain, a surprise 

decline that boosted unit labor costs. Productivity rose 2.7% in the 

previous quarter. 

     Outlays still rose 3.2% in the fourth quarter after a 4.0% gain in 

the previous quarter, but hours worked surged by 3.3%, the strongest 

gain since the fourth quarter of 2014. This followed a 1.2% rise in the 

third quarter, accounting for the dip in nonfarm productivity. 

     Unit labor costs rose 2.0% in the most recent quarter, twice the 

size of the 1.0% gain expected and following a 0.1% decline in the 

previous quarter. 

     On a year/year basis, nonfarm productivity rose by 1.1% in the 

fourth quarter, down from a 1.4% pace in the previous quarter. Unit 

labor costs were up 1.3% year/year, much stronger than the 0.6%  

year/year declines seen in the previous two quarters. 

     For the full year of 2017, productivity rose 1.2%, a solid 

improvement from the 0.1% decline in 2016. At the same time, unit labor 

costs rose 0.2% in all of 2017, a slowdown from the 1.1% rise in 2016. 

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