High US jobless claims stoke slowdown fears
The number of Americans signing up for jobless benefits fell only slightly last week, doing little to calm growing fears of a pullback in the US economy’s recovery.
Initial claims for state jobless benefits slipped 6,000 to 422,000, the Labor Department said, which was higher than the 415,000 claims expected by economists.
The disappointing drop fits in with other data on consumer spending and manufacturing indicating the economy has taken a decisively weak tone as the Federal Reserve prepares to wrap up its $600bn government bond-buying programme.
While independent economists and officials at the US central bank continue to view the soft patch as transitory, concerns of a deeper, protracted slowdown grow.
“The question is whether the slowdown is temporary or something that is much longer,” said Prajakta Bhide a research analyst at Roubini Global Economics in New York. “It’s hard to say. A lot depends on what happens to consumption in the third
quarter.”
Initial claims have now been perched above the 400,000 mark for eight weeks in a row. Analysts normally associate that level with a stable labour market.
The report falls outside the survey period for the government’s closely watched non-farm payrolls data for May, to be released on Friday.
Employers likely added 150,000 jobs, according to a Reuters survey, after increasing payrolls by 244,000 in April.
However, much of the slowdown in growth has been blamed on high commodity prices, bad weather and supply chain disruptions from the March earthquake in Japan, which are all seen as transitory factors.