ECONOMIC INDICATORS

Jobless claims in U.S. rise to highest level in a month

BLOOMBERG FILE PHOTO/JEFF KOWALSKY
A JOB-SEEKER enters Michigan's Unemployment Insurance Agency Problem Resolution Offices in Livonia, Mich.
Posted 8/23/12

WASHINGTON - The number of Americans filing applications for unemployment benefits climbed last week to a one-month high, showing little progress in the labor market.

Jobless claims rose by 4,000 for a second week to reach 372,000 in the period ended Aug. 18, Labor Department figures showed today in Washington. The median forecast of 41 economists surveyed by Bloomberg called for 365,000. The four-week moving average, a less volatile measure, increased to 368,000.

Companies may be keeping payrolls lean after slashing headcounts during the recession while waiting for further assurances that economic growth will pick up. The European debt crisis and slowdown in Asia remain headwinds to investor and business confidence.

“We are stuck in this mediocre range for claims,” said Michael Hanson, a senior U.S. economist at Bank of America Corp. in New York. “In an uncertain environment, firms tend not to stick their neck out and make big hiring and investment decisions.”

Stock-index futures extended earlier losses after the report. The contract on the Standard & Poor’s 500 Index maturing in September fell 0.3 percent to 1,408.1 at 8:44 a.m. in New York.

Estimates in the Bloomberg survey ranged from 355,000 to 373,000. The Labor Department revised the previous week’s figure up to 368,000 from an initially reported 366,000.

A spokesman for the Labor Department said there was nothing unusual in the data last week, and no state was estimated as all reported.

Survey week

Last week covered the period surveyed by the Labor Department to calculate this month’s payroll figures and jobless rate. The four-week moving average was down from 376,000 in the July survey week, which was pushed up by the timing of the annual auto factory shutdowns.

Employers added 163,000 workers last month, the biggest gain since February, according to the Labor Department jobs report issued earlier this month. The figures also showed the jobless rate climbed to a five-month high of 8.3 percent.

Unemployment has been above 8 percent since February 2009 - - the longest stretch in the post-World War II era.

Today’s report showed the number of people continuing to receive jobless benefits climbed by 4,000 in the week ended Aug. 11 to 3.32 million.

The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.

Extended payments

Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 48,300 to 2.33 million in the week ended Aug. 4.

The unemployment rate among people eligible for benefits held at 2.6 percent, today’s report showed.

Thirty states and territories reported a decline in claims, while 22 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 non-farm payrolls report -- accelerates.

Staples Inc. and Lowe’s Cos. are among companies signaling concern about the labor market outlook.

“We further reduced head count during the second quarter, which is now down nearly 15 percent over the past year,” Michael Miles, president and chief operating officer at Staples, said on an Aug. 15 earnings call. “The sales environment remains extremely difficult.”

Lowe’s, the Mooresville, North Carolina-based home improvement retailer, could benefit from a stronger recovery in housing even as hiring stagnates.

Economic challenges

“Obviously, unemployment is a still a challenge and the overall macro environment are still a challenge and a headwind going forward,” Robert Niblock, chairman and chief executive officer of Lowe’s, said on an Aug. 20 earnings call. “We don’t know how demand will be impacted by that but certainly we think housing is nearing the bottom of the cycle.”

Many Federal Reserve policy makers said additional stimulus probably will be needed soon unless the economy shows signs of a durable pickup, according to minutes of their most recent meeting released yesterday.

“Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” according to the record of the Federal Open Market Committee’s July 31- Aug. 1.

Fed Chairman Ben S. Bernanke could signal new measures to support the expansion in a speech next week.

Policy makers “need to do something to counteract this sluggishness in the intentions to expand,” Yelena Shulyatyeva, an economist at BNP Paribas in New York, said before today’s claims report.

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