More Americans than forecast 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. The economy grew less than forecast in the first quarter, a separate report showed.
Consistent gains in hiring are needed to sustain consumer spending, which accounts for about 70 per cent of the world’s largest economy. Federal Reserve officials said the jobless rate “remains elevated” at 9 per cent, one reason central bankers pledged last month to complete their asset-purchase plan by the end of June and keep borrowing costs near zero.
“Claims are still unfortunately seeing some upward pressure from state and local government job cuts,” said Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. The first-quarter growth figures show “a modest soft patch to the recovery,” he said.
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.
