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Labor costs up, fewer jobless
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January 28, 1999: 9:32 a.m. ET
Employment costs post largest jump in five years; claims down in week
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NEW YORK (CNNfn) - The U.S. job market showed signs of tightening as fourth-quarter employment costs rose, though not as much as expected, while the number of Americans applying for first-time unemployment benefits and the four-week unemployment moving average both fell.
The U.S. Labor Department reported Thursday that employment costs for the fourth quarter of 1998 rose 0.7 percent, below economists' consensus estimate of 0.9 percent increase. In the third quarter, employment costs rose a full percentage point.
The employment cost index measures wage and price increases and is a favorite policy-making economic gauge.
For the full year, employment costs rose 3.4 percent, compared with a 3.3 percent increase in 1997. The 1998 figure represents the largest jump since 1993, when employment costs rose 3.5 percent.
In terms of pay, fourth-quarter salary and wage costs moved up 0.7 percent compared with a 1.2 percent rise in the previous quarter. For the year, salaries increased by 3.7 percent, compared with a 3.8 percent jump in 1997.
Benefit costs in the fourth quarter were also up, rising 0.6 percent, compared with a 0.8 percent climb in the third quarter. For the year, they rose 2.6 percent, compared with a 2.1 percent increase in 1997.
Weekly jobless claims drop
Meanwhile, the number of Americans seeking first-time unemployment benefits fell to 301,000 during the week ended Jan. 23 from the revised 316,000 reported a week earlier, the Department of Labor said.
The decline fell well below economists' expectations of 340,000 new claims for the week.
The four-week moving average, considered a more accurate measure of employment trends, also fell, dropping by 17,750 to 333,250 for the week ended Jan. 23 from a revised 351,000 a week earlier.
Continuing claims, however, increased by 118,000 to 2,356,000 for the week ended Jan. 16 from a revised 2,238,000 in the prior week.
In response to the softer-than-expected employment cost index and jobless figures as well as higher than expected durable goods data, the bond market sent the benchmark 30-year U.S. Treasury bond down 13/32 for a yield of 5.148 percent. 
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