Data mixed on economy
Productivity up, but jobless benefit claims are, too
WASHINGTON -- A string of government reports yesterday offered a mixed picture of the US economy.
Worker productivity grew at a 2.5 percent annual rate in the second quarter, the Labor Department said, down from the originally estimated 2.9 percent pace and the slowest clip since the fourth quarter of 2002.
The tally of new jobless benefit claims rose in part on the effects of Hurricane Charley for a second week and factory orders climbed more than expected in July.
Economists said some downward revision in productivity growth was expected after the government cut its estimate for the pace of economic growth in the period. Nor was it necessarily a bad sign for the economy.
''I would say that with productivity growth slowing to the longer-term trend in the second quarter, we should be seeing scope for an increase in hiring," said Peter Hooper, chief US economist at Deutsche Bank Securities Inc.
''I would be a bit more worried if we got a disappointing job number tomorrow," he added.
Productivity was close to analysts' projections for 2.7 percent growth but still was down from the first quarter, when it grew at a 3.7 percent clip. Productivity growth means companies can produce more goods and fatter profits without pushing inflation up.
Workers' real hourly compensation -- adjusted to factor in inflation -- actually fell in the revised second quarter numbers, at a 0.4 percent annual rate, after declining in the the first quarter at a 1.6 percent annual pace. The declines were the first since 2002.
In other reports yesterday, the Labor Department said new claims for unemployment benefits rose 19,000 to 362,000 last week and the Commerce Department said factory orders rose 1.3 percent in July.
A Labor Department analyst said ''a little less than half" of the rise in claims last week was caused by Hurricane Charley, which hit Florida in mid-August.
The four-week moving average, considered a better gauge of the labor market since it irons out week-to-week fluctuations, climbed to 343,000 from 336,750 in the prior week.
