For the first time in three weeks, applications for unemployment fell as demand required employers to retain workers. Claims for jobless benefits dropped by 20,000 to 331,000 for the period ending February 1, outpacing median forecasts which called for a decrease to 335,000. Employers appear to be confident in demand for goods and services as fiscal restraints ease. A quickening pace of hiring and wage growth would help expand consumer spending, which props up most of the economy.
Productivity of the U.S. worker increased at an annual rate of 3.4 percent during Q4 2013, outperforming the median expectation of Bloomberg-surveyed economists who predicted an increase of 2.8 percent. Labor costs also decreased by 1.6 percent last quarter, higher than initially projected. The four-week average of claims rose to 334,000 from 333,750. The number of Americans continuing to receive unemployment benefits rose by 15,000 to 2.96 million for the week ending January 25. For the same week, the unemployment rate among people eligible for benefits held at 2.3 percent.
Just one state and two U.S. territories reported an increase in unemployment benefits claims during the week ending January 25 and New York and Texas led the way on the list of 49 states, which reported decreases. Colder than average weather across the country affected economic data from January with winter storms affecting wide swathes of the nation from the Midwest to the Deep South to Texas to New York. Consequently, companies added 175,000 jobs for the month, the smallest gain in nearly half a year.