Initial Claims decreased to 368,000, the lowest level since May 2008, for the week ending 02/26, against the expected decrease to 396,000, after decreasing to 388,000, the revised level for the previous week. This was the third decline in applications for unemployment benefits in the last four weeks. The 4-week moving average decreased to 388,500, the lowest level since July 2008, from the previous week’s revised average of 401,250. Seasonally adjusted insured unemployment from the prior week, ending on 02/19, was 3,774,000, a decrease of 59,000 from the preceding week’s revised level of 3,833,000. Seasonally adjusted insured unemployment rate from the week ending on 02/19, was 3.0%, a decrease of 0.1% from the previous week’s revised figure of 3.1%. Tomorrow, the monthly employment situation is scheduled for release by the Bureau of Labor Statistics at 8:30 AM EST and the unemployment rate is expected to remain unchanged at 9.1% for February from 9.1% recorded in January.
Nonfarm Productivityfor the 4th quarter remained unrevised at a 2.6% increase after preliminary estimates of a 2.6% increase. Hours increased 1.4% and output increased 4.0%. From the fourth quarter of 2009 to the fourth quarter of 2010, productivity increased 1.9% as output increased 3.6% and hours worked rose 1.6%. Nonfarm productivity increased by 2.3% in the third quarter of 2010, after declining by 1.8% in the 2nd quarter and increasing by 3.9% in the 1st quarter of 2010. Annual average productivity increased 3.9% from 2009 to 2010. Estimates for Unit Labor Costsremained unchanged at a 0.6% decline for the 4th quarter, from preliminary estimates of a 0.6% decrease, following a 0.1% decrease in the figure reported in the 3rd quarter of 2010.
The ISM Services Index is scheduled for release today at 10:00 AM EST, and is expected to remain unchanged in February at 59.4 after increasing to 59.4 in January and 57.1 in December. The index’s complement, the ISM Manufacturing Index increased to 61.4 on Tuesday after increasing to 60.8 in January.
The FOMC Policy Statement will be released today at 2:15 PM EST, which will conclude the 2 day meeting of the Board of Governors. The topic for discussion is the Fed’s Beige Book, which indicated that economic conditions had continued to expand at a modest to moderate pace since the last report. Kansas City and San Francisco noted that their economies expanded further. All other districts reported that conditions were improving or modestly improving while Minneapolis and Dallas experienced moderate growth. Only Chicago noted that economic activity had increased at a pace lower than the previous reporting period. Manufacturing activity continued to expand steadily in all districts with the exception of St. Louis. Housing markets were subdued with only Richmond, Atlanta, and Chicago Districts reporting a slight improvement in the level of recent activity. In the last policy statement released on January 26, the FOMC had decided to maintain the federal funds target rate within a range of 0 to 0.25%.
Upcoming Releases
ISM Services Index (03/03 at 10:00 AM EST)
FOMC Policy Statement (03/03 at 2:15 PM EST)
Unemployment Rate (03/04 at 8:30 AM EST)
Unemployment Rate (03/04 at 8:30 AM EST)
Factory Orders (03/04 at 10:00 AM EST)
