- Preliminary 4Q Non-farm Productivity fell .6% versus estimates of unchanged and a 4.5% increase in 3Q.
- Preliminary 4Q Unit Labor Costs rose 3.5% versus estimates of a 3.5% increase and a .5% decline in 3Q.
- Initial Jobless Claims fell to 273K last week versus estimates of 295K and 284K the prior week.
- Continuing Claims fell to 2509K versus estimates of 2585K and 2573K prior.

BOTTOM LINE: The productivity of US workers during the fourth quarter declined by the most since the third quarter of 2000 and labor costs rose, Bloomberg reported. These disappointing numbers will likely be revised to more positive levels after an expected upward revision to 4Q GDP. Moreover, the average of the last 2 quarters was still pretty good. I continue to believe unit labor costs will remain muted over the intermediate-term.

Initial Jobless Claims unexpectedly declined last week and the number of Americans on unemployment benefit rolls dropped to the lowest level in almost five years, Bloomberg reported. According to a Bloomberg survey of economists, employers added a quarter of a million workers to payrolls last month. The four-week moving average of claims declined to 284,250 from 289,000 the prior week. The unemployment rate among those able to receive benefits, which tracks the US unemployment rate, fell to 1.9% from 2% the prior week. The US economy created 2 million jobs last year. During the last two and a half years, the US has added 4.6 million new jobs, more than the European Union and Japan combined. I continue to believe the labor market will remain healthy over the intermediate-term as corporations increasing spending and consumer spending remains relatively strong.