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.

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.