We just found out the new numbers for the weekly bread lines at the US Labor Department for the week ended January 31. Initial jobless claims have now total 626,000. This is a gain of 35,000 from the week before, which was revised to 591,000 from 588,000. This was the highest reading since October 1982 and the four-week average is up 39,000 to 582,250. The number of continuing jobless claims keeps growing as well. That rose 20,000 and now sits at 4,788,000.
Worker productivity in the quarter before jumped by 3.2% and we saw a gain of 1.8% on unit labor costs. Maybe it is harder to lay off more productive workers. Productivity was expected to hit only +2.0% and labor costs were expected to grow over 3%. If workers are more productive and cost less than expected, maybe businesses will fire fewer of them in hard times. But that is just logic speaking rather than the world where companies have to cut costs as the hunker down for harder times.
This is all a bit of a side show until tomorrow's unemployment and jobless data. The US is expected to see more than 500,000 non-farm payroll cuts and may see 7.5% unemployment in just 24 hours.
Jon C. Ogg
February 5, 2009