The U.S. economy got more good news this morning with strong third-quarter labour productivity and signs of an improving jobs market.

The U.S. Labor Department reported that Initial jobless claims fell by a larger-than-expected 43,000 to 348,000.

“The stunning turnaround in claims is a sign the job market is staggering to its feet and may be about to begin its long-awaited comeback,” comments RBC Financial.”

The four-week average dropped by 10,000 to 380,000, the lowest level since March 2001. This beat economist expectations of a decline of 6,000.

“One week does not a trend make, but this move looks very consistent with the “knock-your-socks-off” trend in recent economic statistics,” says BMO Nesbitt Burns. “This may not be a smokin’ gun, but it’s at least a smokin’ pellet gun.”

In another report, Labor says that U.S. workers boosted their productivity at the fastest rate in 18 months in the third-quarter.

Non-farm business productivity grew at 8.1% from July through September. The pace was the fastest since the first quarter of 2002, and an increase from an already-robust 7% clip in the second quarter of this year.


In a separate release the Labor Department U.S. workers boosted their productivity at the fastest rate in 18 months in the third-quarter.

Non-farm business productivity grew at 8.1% from July through September. The pace was the fastest since the first quarter of 2002, and an increase from an already-robust 7% clip in the second quarter of this year.

“At the same time, unit labour costs have been plunging. This is the source of the incredible profit surge we’ve seen lately,” comments Nesbitt. “Markets were expecting figures for productivity close to what we have here. The fact that they were close to the market consensus should not change their incredible message, however.”

It concludes, “This latest wave of strong U.S. data makes it look more and more like the dam has broken for the U.S. economy.”