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Unemployment numbers rise higher than expected

By Reuters
Thursday, July 21, 2011 9:29 EDT
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WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits rose more than expected last week, pointing to a labor market that is struggling to regain momentum.

Initial claims for state unemployment benefits increased 10,000 to a seasonally adjusted 418,000, the Labor Department said on Thursday.

Economists polled by Reuters had forecast claims rising to 410,000 from a previously reported 405,000.

“We’re just stuck in this trend between 410,000 and 430,000. Generally we’re just really not seeing any improvement but also not much worsening,” said Jeffrey Greenberg, an economist with Nomura Securities in New York.

Stock index futures held earlier gains after the data, while the dollar extended losses against the euro.

The claims data covered the survey period for the closely watched nonfarm payrolls count for July, which will be released on August 5.

Initial claims fell 11,000 between the June and July survey periods, suggesting a modest improvement in payrolls after June’s paltry 18,000 gain.

Job growth has faltered in the last two months, in line with the generally weak tone in the economy.

A rise in layoffs held back payroll growth in May, according to the department’s latest Job Openings and Labor Turnover Survey, which was released last week.

Layoffs were probably behind the downshift in employment growth in June as well.

A major consumer food producer, PepsiCo Inc, tempered its full-year outlook on Thursday due to economic uncertainty, sending its shares down slightly in premarket trading.

The maker of Pepsi-Cola, Frito-Lay snacks and Quaker oatmeal said it now expects 2011 earnings to grow at a high single-digit rate.

The company said the new goal reflects greater uncertainty regarding macroeconomic and consumer trends for 2011, high global commodity cost inflation and ongoing investments in emerging markets and brand building.

A government shutdown in Minnesota following a budget impasse resulted in an additional 1,750 state employees filing claims for jobless benefits last week, the Labor Department said. The shutdown ended this week.

Initial claims have now been above the 400,000 mark for 15 straight weeks. That level is usually associated with a stable labor market.

The four-week moving average of claims, considered a better measure of labor market trends, slipped 2,750 to 421,250.

The number of people still receiving benefits under regular state programs after an initial week of aid dropped 50,000 to 3.70 million in the week ended July 9.

The number of Americans on emergency unemployment benefits declined 80,133 to 3.15 million in the week ended July 2, the latest week for which data is available.

A total of 7.33 million people were claiming unemployment benefits during that period under all programs, down 159,000 from the prior week.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

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