US Unemployment Benefit Applications Dip, Worker Productivity Rises
WASHINGTON (AP) — The number of people applying for U.S. unemployment benefits slipped 2,000 last week to a seasonally adjusted 339,000, the fifth straight decline that shows businesses see little need to cut jobs.
The Labor Department says the less volatile four-week average fell 5,750 to 344,000. The average has dropped 11 percent in the past year.
Applications, which are a proxy for layoffs, are back near pre-recession levels after spiking in early October because of the partial government shutdown and the processing backlogs in California. The steady declines are the latest sign that companies are firing very few workers.
Last week’s report on hiring and unemployment in October showed that businesses are also adding workers at a steady pace.
U.S. workers increased their productivity from July through September at the same modest pace as the previous three months. Steady gains in productivity could dissuade companies from ramping up hiring.
The Labor Department says productivity increased at a 1.9 percent annual rate in the third quarter, up slightly from a 1.8 percent rate in the previous quarter. The second quarter figure was lower than the 2.3 percent rate previously estimated.
Productivity measures the amount of output per hour worked. Greater productivity raises living standards because it enables companies to pay workers more without spurring inflation. But it can also show that companies are getting sufficient gains from their existing workforces and needn’t add more employees.
Labor costs fell in the third quarter, a sign that inflation will remains mild.
The U.S. trade deficit widened in September as imports increased to the highest level in 10 months while exports slipped.
The Commerce Department says the deficit increased to $41.8 billion, up 8 percent from August. It was the largest trade gap since May and marked the third straight month that the deficit has risen since hitting a four-year low in June.
Exports, which hit a record high in June, slipped for the third straight month, dipping 0.2 percent to $188.9 billion, with sales of commercial aircraft and autos both down. Imports rose 1.2 percent to $230.7 billion, the highest level since November.
The deficit with China hit an all-time high of $30.5 billion.
So far this year, the deficit is running 11.7 percent below the pace of 2012.
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