Fewer Americans sought unemployment benefits last week, the government reported Thursday, indicating that companies continue to hire at a modest but steady pace. The Labor Department said weekly jobless claims fell 5,000 to 366,000. The four-week moving average of claims, considered a better measure of labor-market trends, fell to 350,500, the lowest level in five years. The four-week average has fallen almost 6 percent in the last six months. Jobless claims are a gauge of layoffs. When layoffs decline, net hiring typically rises. U.S. employers added an average of 200,000 jobs per month from November through January. Still, the unemployment rate rose 0.1 percentage point in January to 7.9 percent. Overall, almost 5.6 million people received unemployment benefits last week, about 325,000 fewer than the previous week. It is also less than half the number of unemployed, which stood at 12.3 million last month. Many of the unemployed have exhausted their eligibility for benefits. In other news productivity among the US fell in the fourth quarter of 2012 by the most in almost two years as output increased only slightly despite steady gains in employment, the government said Thursday. The Labor Department reported that productivity the amount of output per hour of work"contracted at an annual rate of 2 percent in the October-December period, the biggest drop since the first quarter of 2011. Productivity rose at a 3.2 percent annual rate in the July-September quarter. Output rose 0.1 percent in the fourth quarter, while hours worked rose by 2.2 percent, causing productivity to shrink. Economists expect productivity to rebound in the current quarter because weak output during the fourth quarter was partially due to temporary factors like an unusually sharp drop in government military spending. Unit labor costs"a gauge of the labor-related cost for a unit of output rose at a 4.5 percent rate in the fourth quarter, the fastest gain since the first quarter of 2012. For all of 2012, labor costs were up a modest 0.7 percent, compared to a gain of 2 percent in 2011 and a drop of 1 percent in 2010.
