Drop in U.S. Jobless Claims Underscores Steady Labor Market

(Bloomberg) -- Filings for U.S. unemployment benefits fell last week, underscoring a healthy labor market even as concerns mounted about the impact of the coronavirus on the economy.

Jobless claims fell by 3,000 to 216,000 in the week ended Feb. 29, according to Labor Department figures released Thursday that were in line with the median estimate in Bloomberg's survey of economists. The four-week average, a less-volatile measure, edged up to 213,000.

Key Insights

• The data underscore tight conditions for those seeking jobs, and employers looking to fill positions. There's so far little indication of a hit from the coronavirus in the data, which would be the first to indicate whether firms are starting to lay off employees. There's concern among companies and economists that the virus will weaken demand.
• The figures come ahead of the government's jobs report on Friday. Payrolls probably increased 175,000, below January's pace but in line with the average of the past year, according to a Bloomberg survey of economists. The unemployment rate is seen holding near a 50-year low as wages keep marching higher.
• Federal Reserve Chairman Jerome Powell said that the half- point interest-rate cut Tuesday -- the first emergency cut since the 2008 financial crisis -- was meant to keep the economy strong “in the face of new risks to the economic outlook.”
• Separate data Thursday showed that productivity at the end of last year rose less than first reported. Nonfarm business employee output per hour increased at a 1.2% annualized rate in the fourth quarter. Unit labor costs were revised down to a 0.9% pace of growth from 1.4%. The figures indicate that lackluster efficiency gains persist.

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• Continuing claims, reported with a one-week lag, rose by 7,000 to 1.73 million in the week ended Feb. 22. The four- week average declined to the lowest since Dec. 21.
• The unemployment rate among people eligible for benefits held at 1.2%.
• Claims were estimated for Alabama, Michigan and Puerto Rico.
• Economists surveyed by Bloomberg forecast that claims would fall to 215,000.
• Downward revision in productivity reflects output that rose less than initially estimated and hours worked that were revised up.
• Unit labor costs were revised down as real hourly compensation declined.

--With assistance from Jordan Yadoo.

To contact the reporter on this story: Katia Dmitrieva in Washington at edmitrieva1@bloomberg.net

To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Vince Golle

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