Economic figures out Thursday offered surprises on two fronts, with a steep drop in weekly jobless claims and a sharp increase in quarterly productivity.
The number of people filing new claims for unemployment benefits fell to 348,000 in the week ended Nov. 1, the lowest since January 2001. The number of claims was much less than economists expected and also down sharply from 386,000 in the previous week. Weekly claims have been below 400,000, a level considered to indicate a weak labor market, for five weeks in a row.
According to the government's preliminary reading, productivity in the third quarter rose at an 8.1% annual rate, the most since early 2002 but below economists' forecast of 8.5%. That compares to 6.8% in the second quarter.
The big decline in weekly jobless figures comes one day before the government reports on labor market conditions in October. The unemployment rate is expected to remain at 6.1%, off its recent nine-year low. Economists also forecast the economy will add 50,000 jobs, slightly less than the 57,000 created in September. Job creation has lagged the overall economic recovery.
The latest productivity figures were lower than the consensus forecast of 8.5%, but they did show significant improvement in the manufacturing sector. Worker productivity rose at a 8.6% annualized rate vs. 3.1% in the previous quarter.