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Economy in Brief

Initial Jobless Insurance Claims Up In Latest Week
by Tom Moeller February 5, 2004

Initial claims for jobless insurance rose last week by 17,000 to 356,000. The prior week's level was revised down. Consensus expectations had been for claims of 342,000.

The four-week moving average of initial claims was unchanged at 345,250 (-10.7% y/y).

Continuing claims for unemployment insurance were unchanged w/w and the prior week's level was revised down to a smaller increase of 4,000 versus the initial report.

The insured rate of unemployment was stable at 2.5% for the fourth consecutive week.

Unemployment Insurance (000s) 01/31/04 01/24/04 Y/Y 2003 2002 2001
Initial Claims 356.0 339.0 -10.6% 403 404 406
Continuing Claims -- 3,123 -9.1% 3,535 3,575 3,022
U.S. Productivity Grew in 4Q
by Tom Moeller February 5, 2004

Non-farm labor productivity grew 2.7% last quarter. That was a sharp slowdown from the 9.5% growth in 3Q but came despite a surge in hours and a slowdown in output. Consensus expectations had been for 2.7% growth.

Hours worked by all persons (employment times hours) rose 1.5% (-0.2% y/y), the strongest gain since early 2000. Output growth slowed considerably to 4.2% (5.2% y/y) from 10.4% in 3Q.

On an annual basis, the five-year growth in productivity rose to 3.3% through 2003, the fastest since the mid-1960s. Combined with 1.3% growth in the labor force over that period it suggests potential growth for the economy of 4.6%.

Unit labor costs fell 1.3% and for the year fell 1.2%. The back-to-back annual declines in costs were a record.

Manufacturing sector productivity growth rose 4.8% (5.2% y/y). Unit labor costs in the factory sector fell 3.1% (-0.9%).

"Is There a Digital Divide" from the Federal Reserve Bank of San Francisco discusses who uses computers in this report.

Non-farm Business Sector (SAAR) 4Q '03 3Q '03 Y/Y 2003 2002 2001
Output per Hour 2.7% 9.5% 5.3% 4.2% 4.9% 2.1%
Compensation 1.3% 3.4% 3.3% 2.9% 2.2% 3.9%
Unit Labor Costs -1.3% -5.6% -2.0% -1.2% -2.5% 1.7%
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