US suffers shock rise in state jobless benefit claims
NEW claims for state jobless benefits unexpectedly rose last week, while manufacturing activity and employment slowed in June, heightening fears the US economic recovery is stalling.
The Labor Department said that initial claims for state unemployment benefits increased by 13,000 to 472,000, above expectations for 452,000.
While layoffs have slowed sharply from early last year, businesses remain sceptical of the strength of the recovery and are holding back on hiring, keeping claims for unemployment benefits at uncomfortably lofty levels.
“It’s looking more and more like the job market is treading water. Layoffs are down from 2009, but hiring hasn’t really picked up and this is disappointing,” said Stephen Bronars, a senior economist at Welch Consulting.
“There is a lot of uncertainty on the hiring side that’s causing things to remain sluggish. In order for the recovery to give people confidence it needs to cut across different sectors of the economy,” he added.
More than 8m Americans lost their jobs during the recession, but employment growth has been so tepid that it could take years for many of them to find work again.
The data came ahead of today’s closely-watched non-farm payrolls.