Jobless claims edge above 400,000
WASHINGTON (Reuters) – New claims for unemployment benefits rose unexpectedly last week, popping above 400,000 for the first time in just over a month and reinforcing the view that the battered labor market was healing only slowly.
Initial claims for state unemployment benefits climbed to a seasonally adjusted 402,000 from an upwardly revised 396,000 in the prior week, the Labor Department said on Thursday.
“They’re not in a danger zone, but the trend is not becoming healthier,” Pierre Ellis, an economist at Decision Economics in New York, said of the claims data.
Initial claims below the 400,000 mark are normally seen as pointing to some healing in the jobs market.
U.S. stocks futures fell after the data was published, while prices for government debt pared losses.
The U.S. economy has gathered steam in the second half of the year thanks to robust consumer spending and factory output, with the wider economy expanding at a 2 percent annual rate in the third quarter. It could accelerate in the fourth quarter.
That could help the country avoid a new recession, which is expected in the euro zone. Economists expect Friday’s payroll report for November to show 122,000 jobs were created during the month, more than the previous month.
Early reports by big U.S. retailers showed November sales were better than expected, buoyed by a strong turnout on “Black Friday,” the busiest shopping day of the year.
Total sales over the weekend by retailers reached $52.4 billion, up from $45 billion last year, according to the National Retail Federation.
Still, economists see a risk of a U.S. recession next year, especially if lawmakers allow extended unemployment benefits and a payroll tax cut to expire at the end of 2011.
The euro zone sovereign debt crisis also could derail the country’s recovery from the deep 2007-2009 recession, which has left the unemployment rate stuck around 9 percent.
European policymakers are trying to contain the debt troubles, and the European Central Bank signaled on Thursday it could take stronger action if political leaders agree next week on much tighter budget controls in the 17-nation euro zone.
In much of the world, economic growth appears to be slowing.
Manufacturing activity is contracting across Europe and most of Asia, data showed on Thursday, and a Chinese official declared that the world economy faces a worse situation than in 2008 when Lehman Brothers collapsed.
In the U.S. labor report, the four-week moving average of claims, a closely followed measure of labor market trends, increased 500 to 395,750.
Economists polled by Reuters had forecast weekly claims at 390,000.
“If claims start to rise from here it would not be a good sign for the economy,” said Gary Thayer, a macro strategist at Wells Fargo Advisors in St. Louis.
The number of people still receiving benefits under regular state programs after an initial week of aid rose 35,000 to 3.74 million in the week that ended November 19.
A Labor Department official said there was nothing unusual in the data, although government statisticians had to estimate claims data for Alaska and Washington DC.
Economists had forecast so-called continuing claims falling to 3.65 million from a previously reported 3.69 million.
A total of 7.01 million people claimed unemployment benefits under all programs during the week ending Nov 12, up 276,832 from the prior week.
(Additional reporting by Ellen Freilich in New York; Editing by Andrea Ricci)
mochila insert follows