US joins global slowdown with another rise in jobless claims

 
Tim Wallace
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THE US outlook took a blow yesterday as unexpectedly high unemployment figures, weak business data, and a downward revision to GDP growth all cast doubt on the strength of the global leader’s recovery.

Official data recorded 383,000 new claimants for unemployment benefits last week, up 10,000 on the week before and the fourth consecutive rise – reversing the slow decline seen over earlier months.

Similarly, figures from private payrolls processor ADP showed private employers created 133,000 jobs in May, below the expected 148,000.

The Chicago business barometer slowed to its lowest level since September 2009 last month, with the production index falling from 57.1 in April to a seasonally adjusted 50 in May – showing production flat on the month.

Meanwhile the Commerce Department revised its first quarter GDP estimate to show annualised growth of 1.9 per cent, not the 2.2 per cent first thought, in part because consumer and government spending was lower than first thought.

That represents a slowdown from the three per cent GDP growth seen in the final quarter of 2011, in part because corporate profits expanded by $11.4bn (£7.4bn), slower than the $16.8bn rise in the previous quarter.

“The economy is growing at an anaemic pace and the job market is showing some signs of hesitation in the pace of hiring,” warned economist Paul Edelstein from IHS Global Insight.

“There is a lot to worry about.”