Labor Intensive

Worker productivity grew at its fastest pace in two years last quarter

Worker productivity grew at its fastest pace in two years in the third quarter, other data from the Labor Department showed January 8, suggesting "the much-anticipated artificial intelligence-driven boom was underway," according to Lucia Mutikani, an economist at Reuters.

"The productivity surge, which depressed unit labor costs, underscored what economists have termed a jobless economic expansion," Mutikani added. It followed on the heels of robust economic growth in the third quarter.

Initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 208,000 for the week ended January 3. Economists polled by Reuters had forecast 210,000 claims for the latest week. Claims have been choppy in recent weeks amid challenges adjusting the data for seasonal fluctuations around the year-end holiday season. Through the volatility they have remained at levels consistent with low layoffs.

Job cuts in the technology sector were attributed to AI and overhiring in prior years. Planned hiring by businesses fell 34% to 507,647 positions last year, the lowest level since 2010. "Lackluster hiring means more unemployed people are experiencing long bouts of joblessness," the Reuters staff concurred.

The number of people receiving unemployment benefits after an initial week of aid, a proxy for hiring, increased 56,000 to a seasonally adjusted 1.914 million during the week ended December 27, the claims report showed.