Jobless Claims Jump by Most in Six Months in Labor-Market Warning Sign

Image: Jobless Claims Jump by Most in Six Months in Labor-Market Warning Sign

Thursday, 16 May 2013 08:32 AM

 

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The number of Americans filing new claims for unemployment benefits climbed last week at the fastest pace in six months, a worrisome sign for the economy which has been hit by government austerity.

Initial claims for state unemployment benefits jumped by 32,000 to a seasonally adjusted 360,000, the Labor Department said on Thursday. That was the biggest jump since November and confounded analysts' expectations for a more modest increase.

Claims for the prior week were revised to show 5,000 more applications received than previously reported.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

A Labor Department analyst said no states had estimated their data, and that there were no signs furloughs for government employees played a significant role in last week's increase in claims.

The U.S. economy has shown signs that growth slowed late in the first quarter and in April as an austerity drive by the federal government weighed on consumers and businesses. Washington hiked taxes in January and initiated sweeping budget cuts in March.

Data on jobless claims has been a relative bright spot in the U.S. labor market, and analysts will be cautious over reading too deeply into one week of dour data, which showed claims at their highest since late March.

The four-week moving average for new claims, a better gauge of job market trends, remains near its lowest levels since the start of the 2007-09 recession. Last week, the moving average rose 1,250 to 339,250.

Many analysts have noted that a reticence by employers to lay off workers has made an outsized contribution to recent improvements in employment levels.

Last month, employers on net added 165,000 new jobs to their payrolls while the unemployment rate dropped to a four-year low at 7.5 percent.

The improvement in employment has contrasted sharply with other data, including retail sales and manufacturing, that have suggested a modest cooling in the economy at the end of the first quarter that persisted early in the April-June period.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid dropped 4,000 to about 3 million in the week ended May 4.

Editor's Note: Prophetic Economist Warns: “It’s Curtains for America.” See Evidence.

© 2014 Thomson/Reuters. All rights reserved.

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