By Shobhana Chandra May 27 (Bloomberg) -- More Americans than forecast filed applications for unemployment benefits last week, indicating firings persist even as the economy rebounds and employment picks up. Initial jobless claims fell by 14,000 to 460,000 in the week ended May 22, Labor Department figures showed today in Washington. Economists forecast claims would drop to 455,000, according to the median estimate in a Bloomberg News survey. The economy expanded in the first quarter at a slower pace than initially estimated, the Commerce Department said today. Some companies such as Pfizer Inc. are shedding workers and closing plants to cut costs, even as the economy has added jobs each month this year. The unemployment rate, at 9.9 percent in April, will still take time to recede as more jobseekers enter the workforce and fail to find work. “It’s going to be a slow recovery for the labor market,” Lindsey Piegza, an economist at FTN Financial in New York, said before the report. “Companies are still hesitant to take on additional workers. It’s going to take a while for the unemployment rate to come down.” The economy grew at a 3 percent annual rate in the first three months of the year, compared with an advance estimate of 3.2 percent, Commerce Department figures showed. Consumer and business spending rose less than initially estimated. Stocks Trim Gains Stock-index futures trimmed earlier gains following the reports. The contract on the Standard & Poor’s 500 Index rose 2.1 percent to 1,083.8 at 8:38 a.m. in New York. Treasury securities dropped, pushing the yield on the 10-year note up to 3.28 percent from 3.19 percent late yesterday. Applications were projected to drop from 471,000 initially reported for the prior week, according to the median forecast of 45 economists in the Bloomberg survey. Estimates ranged from 440,000 to 465,000. The number of people receiving unemployment insurance and those getting extended payments declined. The four-week moving average for initial claims, a less volatile measure than the weekly figures, rose to 456,500 last week from 454,250, today’s report showed. The number of people continuing to receive jobless benefits dropped by 49,000 in the week ended May 15 to 4.61 million, the lowest since March 27 and in line with the median forecast. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs. Emergency Claims Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by 2,710 to 5.34 million in the week ended May 8. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.6 percent in the week ended May 15. Twenty nine states and territories reported an increase in claims, while 24 reported a decrease. These data are reported with a one-week lag. Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates. That relationship has broken down in recent months as some companies continue to cut staff, while others expand, pointing to an uneven recovery. Pfizer’s Plans Pfizer on May 18 said it will shut eight plants and scale back operations at six others worldwide, cutting 6,000 jobs as part of a previously announced plan. New York, Virginia, Massachusetts and North Carolina are among locations for plant closings or downsizing, New York-based Pfizer said, without specifying how many U.S. jobs will be shed. Employers hiring include Ford Motor Co., which is adding about 1,500 positions this year at plants in Chicago and Wayne, Michigan. The Dearborn, Michigan-based carmaker is also laying off 900 workers at a factory in Flat Rock, Michigan. Labor Department figures due on June 4 may show payrolls climbed in May after rising in April by the most in four years, according to the Bloomberg survey. The unemployment rate probably fell to 9.8 percent, from 9.9 percent in April. To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

Source