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July 26, 2001
Improvement in Two Economic Indicators
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First, it said new jobless claims fell sharply last week, dropping below 400,000 for the first time in over a month.
Second, it announced that the employment cost index had risen 0.9 percent in the second quarter of this year, compared to a 1.1 percent rise in the first quarter.
The jobless claims
New claims for state unemployment benefits fell to 366,000 in the week ended July 21, compared to a revised 417,000 for the prior week, the Labor Department reported.
The department attributed some of the drop in jobless claims to the volatility often seen during July, when auto plants and other factories temporarily shut down.
Yet the four-week moving average of new claims, considered a better gauge of jobless trends, fell to 409,000 from the previous period's revised 415,250. Economists watch the four-week moving average more closely, because it corrects fluctuations in the weekly data.
Continued claims, from workers who already have claimed at least a week of benefits, fell to 3.09 million in the week ended July 14, the latest week available, after a revised reading of 3.1 million the prior week.
The cost of employment
Within the employment cost index, wages and salaries increased 1 percent in the first quarter, identical to the change in the previous three-month period. Benefit costs rose 1 percent, following a 1.3 percent increase in the first quarter.
For state and local government workers, compensation costs and wages and salaries rose 1.1 percent during the March-June period. In the first quarter, they saw 1 percent increases. Benefit costs rose 1.1 percent in the second quarter, following a 1.2 percent rise in the first.
The Labor Department also announced over-the-year changes in employment costs, not seasonally adjusted. In private industry, wages and salaries rose 3.8 percent for the year that ended in June 2001, after increasing 4.1 percent in the year ended June 2000.
Benefit costs for private industry workers increased 4.8 percent for the year ended in June 2001, moderating from the increase of 5.7 percent in June 2000.
Again in private industry, over-the-year compensation cost increases were 4.2 percent for white-collar occupations, 3.6 percent for blue-collar occupations, and 4.1 percent for service occupations.
Among the occupational groups, increases in compensation costs ranged from 2.8 percent each for sales workers and for machine operators, assemblers, and inspectors to 4.7 percent for administrative support, including clerical occupations.