The statistics released by the Labor Department today painted a mixed picture of the economy. The good news came in the productivity numbers, which increased by 6,2 percent in the fourth quarter of 2009. Output increased by 7.2 percent while hours worked only increased by 1.0 percent. Over the course of the year, productivity increased by 5.1 percent, which was the biggest gain since 2001-2002.
Analysts warned that these types of gains may not be sustainable, as employers were able to keep from adding to their payrolls even though sales stabilized. As the chief economist from Deutsche Bank Securities in New York said, "the productivity gains of 2009 are unsustainable." The gains can be attributed to "rising output amid ongoing labor cuts" and as employers begin to hire people as growth picks up, they are unlikely to continue.
The release of the weekly initial unemployment claims data from the Labor Department was the bad news part of the equation. Initial claims increased by 8,000 from last week's revised figure of 472,000, coming in at 480,000. The four week moving average increased to 468,750, an increase of 11,750 from last week's revised 457,000.
Continuing claims increased by 2,000 to 4.602 million. The four week moving average for continuing claims was 4.618 million, a drop of 51,250 from last week's revised figure.
There were 31 states reporting a drop of more than 1,000 claims, with California's decrease of 22,674 leading this group. On the down side, Puerto Rico and Oregon had more than 1,000 more claims than the prior week. Puerto Rico saw an increase of 2,439 claims and Oregon's claims increased by 4,336.
Both the productivity figures and initial claims came in below the consensus estimate. Productivity was expected to increase by 6.5 percent, with estimates ranging from 4.3 percent to 8.5 percent. And initial claims were projected to come in at 455,000, with projections ranging from 440,000 to 475,000.
Many expect the trend of a slow and steady recovery to continue. The CEO of Eaton Corp said "the economy has continued to move along the slow recovery path that we thought it would."
This is a trend that investors need to keep track of. When will the economy pick up steam? We'll get another indicator of whether this is happening tomorrow, when the government releases its monthly payrolls data.
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Analysts warned that these types of gains may not be sustainable, as employers were able to keep from adding to their payrolls even though sales stabilized. As the chief economist from Deutsche Bank Securities in New York said, "the productivity gains of 2009 are unsustainable." The gains can be attributed to "rising output amid ongoing labor cuts" and as employers begin to hire people as growth picks up, they are unlikely to continue.
The release of the weekly initial unemployment claims data from the Labor Department was the bad news part of the equation. Initial claims increased by 8,000 from last week's revised figure of 472,000, coming in at 480,000. The four week moving average increased to 468,750, an increase of 11,750 from last week's revised 457,000.
Continuing claims increased by 2,000 to 4.602 million. The four week moving average for continuing claims was 4.618 million, a drop of 51,250 from last week's revised figure.
There were 31 states reporting a drop of more than 1,000 claims, with California's decrease of 22,674 leading this group. On the down side, Puerto Rico and Oregon had more than 1,000 more claims than the prior week. Puerto Rico saw an increase of 2,439 claims and Oregon's claims increased by 4,336.
Both the productivity figures and initial claims came in below the consensus estimate. Productivity was expected to increase by 6.5 percent, with estimates ranging from 4.3 percent to 8.5 percent. And initial claims were projected to come in at 455,000, with projections ranging from 440,000 to 475,000.
Many expect the trend of a slow and steady recovery to continue. The CEO of Eaton Corp said "the economy has continued to move along the slow recovery path that we thought it would."
This is a trend that investors need to keep track of. When will the economy pick up steam? We'll get another indicator of whether this is happening tomorrow, when the government releases its monthly payrolls data.
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