U.S. GDP expanded to 2.3% in 2019, one of the slowest paces in three years, having scored a 2.9% advance in 2018.
The number of people who have claimed state unemployment benefits fell to a minimum of nine months last week in the United States, suggesting that a tighter labor market would continue to maintain the longest economic expansion in history of the country.
Despite this, the U.S. economy may remain on a path of moderate growth, as other data released on Thursday indicated that worker productivity recovered less than expected in the fourth quarter.
Numb productivity is one of the reasons why the economy has struggled to achieve Donald Trump’s administration’s goal of 3% annual growth. U.S. GDP expanded 2.3% in 2019, the slowest pace in three years, having scored a 2.9% advance in 2018.
Initial requests for state unemployment benefits in the United States fell by 15,000 to a seasonally adjusted figure of 202,000 in the week ending February 1, the lowest reading since last April, the Department of Labor said.
Economists surveyed by Reuters had predicted that unemployment grant orders would drop to 215,000 over the previous week.
The four-week moving average of initial unemployment orders, considered a better measure of labor market trends as it reduces weekly volatility, fell by 3,000 to 211,750 applications last week, also the lowest level since last April.
Unemployment benefit application data is unrelated to the January employment report, which is scheduled for Friday as it is outside the survey period. However, orders were lower in January compared to December, suggesting an uptick in job growth.
According to a Reuters survey, U.S. nonfarm payrolls likely increased by 160,000 jobs in January after an increase of 145,000 in December.
However, job creation could exceed expectations for the unusually mild weather of the last month, which could have driven hiring on construction sites and in the leisure and lodging industry.
The strength of the labor market is helping to shore up consumer spending, supporting the economy, now in its eleventh year of expansion. In another report released Thursday, the Department of Labor said that non-agricultural productivity, which measures hourly output per worker, increased at an annualized rate of 1.4% in the last quarter.
Meanwhile, productivity declined at an unrevised rate of 0.2% in the July-September period, the biggest drop since the fourth quarter of 2015. Economists had predicted an uptick in productivity at a rate of 1.6% in the fourth quarter.
Compared to the fourth quarter of 2018, productivity increased at a rate of 1.8%. In 2019 it accelerated 1.7%, the most robust growth since 2010, after increasing 1.3% in 2018.
