New U.S. claims for unemployment benefits fell as expected last week, a government report showed on Thursday, showing little sign of a pick-up in layoffs in the wake of a slump in business and consumer confidence.
U.S. nonfarm productivity was weaker than previously thought in the second quarter and wage growth was a bit stronger, but not enough to ignite inflation pressures.
TOM PORCELLI. CHIEF U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK
Ultimately the report has no bearing on our payrolls forecast for tomorrow and we still expect a 55k gain in the private sector. Today's number is kind of ho-hum and does not change the discussion at all. While firing has not accelerated, hiring remains utterly modest.
PETER BOOCKVAR, EQUITY STRATEGIST, MILLER TABAK + CO, NEW YORK
Initial claims remaining stubbornly above 400k point to a still very uncertain labor market but a pace of firings that is not getting any worse. The pace of hirings of course still remains lackluster.
AVERY SHENFELD, CHIEF ECONOMIST, CIBC WORLD MARKETS, TORONTO
U.S. jobless claims data were uneventful, and in line with consensus for a slight dip from the prior week, to 409,000. Claims are essentially on a flat trend over the past month after adjusting for strike impacts, providing some comfort that July's improvement in economic reports was not followed by a deep dive in August. Less supportive was the fact that continuing claims were revised higher for the prior week and at 3,735,000, were above consensus. The Verizon strike dropped out as a factor that had lifted initial claims in recent weeks.
Separately, Labor productivity was revised a bit weaker for Q2 in line with the downward revision to GDP for that quarter, lifting unit labor costs to 3.3 percent annualized gain, a negative for profits going forward. Overall, these reports won't be market movers, with the focus on Friday's jobs figures and the ISM later today.
DAVID ADER, HEAD OF GOVERNMENT BOND STRATEGY, CRT CAPITAL GROUP, STAMFORD, CONNECTICUT
These are really ho-hum figures as claims were not too far from consensus and productivity revisions were incorporated into GDP. The (bond) market is a tad lower perhaps as some components were a bit more onerous than expected, but these are not really tradable beyond that. Clearly ISM in 90 minutes takes precedent.
BRIAN JONES, SENIOR ECONOMIST, SOCIETE GENERALE, NEW YORK
They're very close to street expectations. The more important thing going into tomorrow's report is you had a substantial increase in the number of people on state benefit roles on the weekend of the 13th, and that suggests there could be some significant downside risk to the consensus number for payrolls.
DAVID SLOAN, ECONOMIST, IFR ECONOMICS, A UNIT OF THOMSON REUTERS
Initial claims fell by 12k to 409k in the week to August 27, slipping back from a preceding 421k (revised up from 417k) that has been inflated by the effects of a strike at Verizon. The latest number was in line with market expectations and the Labor Dep't saw no special factors, while the week's seasonal factors were near neutral. The latest number, while down only because special factors faded, suggests only tentative signs of an accelerated labor market deterioration in response to recent market turmoil.