More Americans unexpectedly filed applications for unemployment benefits last week, a sign the labor market is struggling to gain momentum.
Jobless claims increased by 10,000 to 424,000 in the week ended May 21, Labor Department figures showed today in Washington. The median estimate of economists in a Bloomberg News survey called for a drop to 404,000.
Consistent gains in hiring are needed to sustain consumer spending, which accounts for about 70 percent of the world’s largest economy. Federal Reserve officials said the jobless rate “remains elevated” at 9 percent, one reason central bankers pledged last month to complete their asset-purchase plan by the end of June and keep borrowing costs near zero.
“Conditions in the labor market will continue to be tenuous as firms look for a sustained pickup in sales activity before increasing employment opportunities,” Maxwell Clarke, chief U.S. economist at IDEAglobal in New York, said before the report.
Estimates in the Bloomberg survey of 47 economists ranged from 390,000 to 420,000. The Labor Department revised the prior week’s figure up to 414,000 from the 409,000 initially reported. There were no special factors behind last week’s increase, a Labor Department official said as the figures were released.
The four-week moving average, a less volatile measure than the weekly figures, fell to 438,500 last week from 440,250.
The number of people continuing to receive jobless benefits dropped by 46,000 in the week ended May 14 to 3.69 million, the lowest in a month.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Extended Benefits
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 63,215 to 4.05 million in the week ended May 7.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 2.9 percent in the week ended May 14 from 3 percent.
Forty states and territories reported a decrease in claims, while 13 reported an increase. 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 payrolls report -- accelerates.
Some companies are already making plans to expand payrolls further in 2012. General Motors Co. (GM) said this week it will invest $69 million and add 2,500 jobs to start making new models at the Detroit plant that builds the Chevrolet Volt plug-in hybrid as the automaker boosts U.S. production.
April Employment
Employment expanded last month by the most since May 2010, even as the jobless rate climbed to 9 percent, Labor Department data showed. Labor market conditions had “continued to improve, albeit gradually,” Fed officials said in minutes of their April 26-27 meeting released last week.
At the same time, “the unemployment rate remains elevated,” central bankers said.
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
