The Department of Labor reported Thursday that first-time claims for unemployment bumped up slightly last week: 226,000 filed new claims, up from 219,000 the week before. And during that week before — the one that ended on July 26 — the total number of people claiming unemployment benefits was just shy of two million. That’s the most since November of 2021.

Thursday also brought labor productivity data for the second quarter. How much economic output the average worker creates was up 2.4%, according to the Bureau of Labor Statistics.

Usually, increased productivity goes hand-in-hand with increased wages and economic growth. But last quarter’s gains happened while the labor market was cooling down. So what gives?

First thing to keep in mind about labor productivity is it tends to bounce around, said Gary Schlossberg, a global strategist for Wells Fargo Investment Institute.

“You get a lot of noise in those numbers,” he said.

Schlossberg said the Q2 increase could be the result of a one-off drop in imports last quarter, due to tariff policy. That raised GDP, which is used to calculate productivity. And so?

“The one quarter number is really more arithmetic than indicative of a trend,” he said.

One way to think about how productivity could trend in the future is to look at what employers are doing now, Schlossberg said. Which is not much.

“I would characterize business as sort of a deer in the headlights. They're so unsure about what's happening. They don't wanna let workers go, but they're reluctant to hire for the same reason,” he said.

That means workers with jobs can’t upgrade to something better, said Preston Mui, a senior economist at Employ America.

“There's not a lot of job switching. So there's probably not a lot of people moving from these low productivity to higher productivity jobs,” he said.

But Mui said something else is happening in the labor market too. The workforce is growing slowly, and could even shrink, in part due to President Trump’s immigration crackdown. And that can actually boost productivity.

Mui said to imagine going into an elementary school classroom, and measuring the height of each student. Every month, the average height grows because the children are growing. But if you take a bunch of the shortest kids out of the class and measure again? Suddenly, it looks like the average height of the children in the classroom has gone up, even if the remaining students haven’t actually grown.

Something like that happens during recessions, Mui said. When jobs go away, it tends to be the less productive ones, so overall productivity appears to rise.

“What you are gonna see if you exclude those people is in accounting terms and acceleration in productivity growth, but that's a bit of a statistical illusion,” said Guy Berger, director of economic research at the Burning Glass institute.

Berger said, whether by recession or immigration crackdown, “artificially boosting the numbers by excluding lower productivity workers does not actually benefit the U.S. economy.”

But remember: Productivity data is noisy. So Berger said it’s better to think decade by decade, rather than quarter by quarter.