But the manufacturing employment downturn has yet to spread to other sectors of the economy.
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A day ahead of the release of the closely watched monthly jobs report, the Labor Department released a report on Thursday showing a modest uptick in first-time claims for USA unemployment benefits in the week ended August 27th.
The number maintains the now 78 straight week streak of claims coming in under 300,000.
“In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal-funds rate has strengthened in recent months”, Fed Chairwoman Janet Yellen said in a speech last week.
With the labor market nearing full employment, there probably is limited scope for further declines in claims.
“Despite some seeming trouble in the manufacturing sector, the overall outlook for employment is positive”, said Michael Gapen, chief economist at Barclays in NY. The dollar was slightly higher against a basket of currencies.
U.S. stocks were generally weaker, while prices for U.S. Treasuries rose.
The claims data has no bearing on Friday’s employment report for August as it falls outside the survey period.
The government jobs report being released Friday is expected to show employers added 180,000 jobs last month, according to economists surveyed by FactSet. The unemployment rate is seen falling one-tenth of a percentage point to 4.8 per cent.
The computer sector dominated the job cuts last month, with Cisco Systems announcing plans to reduce its workforce by 5,500 jobs. Many layoffs may also reflect company- or industry-specific causes, such as cost-cutting or business restructuring, rather than underlying labor market trends.
In another report, the Labor Department said unit labour costs, the price of labour per single unit of output, increased at a 4.3 per cent annual rate as opposed to the 2.0 per cent pace reported last month.
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Thursday’s claims report also showed the number of people still receiving benefits after an initial week of aid increased 14,000 to 2.16 million in the week ended August 20.
