As is the case every Thursday, the BLS reported its weekly initial claims which unlike two weeks ago did not estimate the initial unemployment claims for America's most populous state when the number plunged, and has now missed expectations for two weeks in a row, printing at 366K, on expectations of a 360K number, while last week's 368K was as usual revised upward to 371K. As a result, the Mainspin Media already has its headline: Initial Claims decline by 5,000. Such is life under the US Department of Truth, even as unadjusted initial claims spiked by 16.7K to 386K in the week ended February 2. In other news, people on Extended Unemployment Comp plunged by 288K after soaring in the week prior, and making some wonder just what is going on with the EUC 2008 data series for it to get such massive weekly shifts each week.
But perhaps, more importantly, the BLS also reported Q4 unit labor costs and nonfarm productivity and as a result of the previously reported adjustments to worker data and negative GDP print, it was widely expected that productivity would drop. It did, but it did so far more than most expected, plunging by a whopping 2%, which "reflects increases of 0.1 percent in output and 2.2 percent in hours worked. (All quarterly percent changes in this release are seasonally adjusted annual rates." The offset: unit labor cost which soared by 4.5% in the fourth quarter of 2012, the combined effect of the 2.0 percent decrease in productivity and a 2.4 percent increase in hourly compensation. Unit labor costs rose 1.9 percent over the last four quarters.