The number of Americans filing for jobless aid rose to an eight-month high last week and productivity growth slowed in the first quarter, clouding the outlook for an economy that is struggling to gain speed.
While the surprise jump in initial claims for unemployment benefits was attributed to factors ranging from spring break layoffs to the introduction of an emergency benefits program, economists said it corroborated reports this week indicating a loss of momentum in job creation.
New claims for state jobless benefits rose 43,000 to a seasonally adjusted 474,000, the highest since mid-August, the Labor Department said. Economists had expected claims to fall to 410,000.
A second report from the department showed nonfarm productivity increased at a 1.6 per cent annual rate, braking from a 2.9 percent pace in the fourth quarter. The growth pace was above economists’ expectations for 1 percent.
“We do not think that the entire rise in claims over the last month can be explained by special factors alone,” said Harm Bandholz, chief U.S. economist at UniCredit Research in New York. “It seems instead as if the improvement in the labour market slowed a bit.”