Jobless Claims Fall Less Than Expected, Stay Near Worrisome Level

Thursday, 20 Sep 2012 08:33 AM

 

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The number of Americans filing new claims for jobless benefits held near two-month highs last week, suggesting some weakening in labor market conditions.

Initial claims for state unemployment benefits slipped 3,000 to a seasonally adjusted 382,000, the Labor Department said on Thursday.

The prior week's figure was revised up to show 3,000 more applications than previously reported. Economists polled by Reuters had forecast claims falling to 375,000 last week.

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

"We've seen a little move upward in jobless claims over the last few weeks, but nothing to suggest the economy is in trouble. It's more the case that we are still in a period of slow growth," said Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis.

The four-week moving average for new claims, a better measure of labor market trends, rose 2,000 to 377,750 — the highest level since June. It was the fifth consecutive weekly increase in the measure.

U.S. stock index futures were modestly weaker, while U.S. bond prices added to slight gains after the data. The dollar was little changed.

Last week's report covered the period for September nonfarm payrolls survey. Claims have risen 8,000 between the August and September survey periods, suggesting modest job growth this month.

Employers added 96,000 jobs last month, a step down from July's 141,000 count. While the unemployment rate dropped to 8.1 percent in August from 8.3 percent, it was because many Americans gave up the search for work.

Lackluster labor market conditions prompted the Federal Reserve last week to launch an aggressive stimulus program, with the U.S. central bank buying an additional $40 billion worth of mortgage backed securities each month until it sees a sustained upturn on the jobs front.

"We will probably see positive, but sub-par, job growth — not enough to really bring down the unemployment rate. That makes it likely the Fed will go through with their quantitative easing," said Thayer.

The unemployment rate has been stuck above 8 percent for more than three years, the first time this has happened since the Great Depression. The sluggish jobs market poses a hurdle to President Barack Obama's re-election.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 32,000 to 3.27 million in the week ended September 8, the claims report showed.

That was the lowest level since mid-May and most likely reflected people exhausting their benefits.

Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible

© 2014 Thomson/Reuters. All rights reserved.

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