The number of Americans seeking jobless benefits fell last week to a level that indicates the labor market has not improved this year even as the economy expanded.
Initial jobless claims fell by 6,000 to 472,000 in the week ended Aug. 28, in line with the median forecast of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. Applications exceeded the 463,000 average so far this year.
Employment is stagnating as businesses, uncertain sales will hold up, delay adding workers. Federal Reserve policy makers, who cut growth forecasts for the second half of 2010, indicated they were concerned lingering unemployment and “elevated” claims were limiting consumer spending, the biggest part of the economy.
“The rate of layoffs is still uncomfortably high,” said Chris Low, chief economist at FTN Financial in New York. “This continues to feed the unemployment rolls. We see no reason to expect an acceleration in consumer spending.”
Stock-index futures held earlier gains after the report. Futures on the Standard & Poor’s 500 Index expiring this month rose less than 0.1 percent to 1,082.5 at 9:03 a.m. in New York. The yield on the 10-year Treasury note increased to 2.61 percent from 2.58 percent late yesterday.
The August payrolls report may show tomorrow the economy lost 100,000 jobs, the third straight monthly decline, according to the Bloomberg survey median. The drop will reflect dismissals of temporary government workers who were hired for the census. The unemployment rate rose to 9.6 percent, economists forecast.
The productivity of U.S. workers fell more than previously estimated in the second quarter, pushing up labor costs and showing the slowdown in growth will limit profits, another Labor Department report today showed.
The measure of employee output per hour dropped at a 1.8 percent annual rate, the biggest decline in almost four years, compared with the 0.9 percent decrease initially calculated, according to the revised figures. Labor expenses rose at a 1.1 percent pace, the most in more than a year.
Jobless benefits applications were projected to rise to 475,000 from 473,000 initially reported for the prior week, according to the median forecast of 40 economists in a Bloomberg survey. Estimates ranged from 460,000 to 485,000. The Labor Department revised the prior week’s figure up to 478,000.
The four-week moving average, a less volatile measure than the weekly figures, decreased to 485,500 last week from 488,000, today’s report showed.
The number of people continuing to receive jobless benefits fell by 23,000 in the week ended Aug. 21 to 4.46 million. They were forecast to drop to 4.45 million.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 320,000 to 5.44 million in the week ended Aug. 14.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.5 percent in the week ended Aug. 21.
States and Territories
Thirty-nine states and territories reported a decline in claims, while 14 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. That relationship has broken down in recent months as some companies continue to cut staff, while others expand, pointing to an uneven recovery.
Delta Air Lines Inc.’s Comair regional carrier will eliminate most of its 50-seat jets and cut an unspecified number of jobs to lower costs by $110 million during the next four years, the company said yesterday. Its 2,600-person workforce will shrink, Comair President John Bendoraitis said in a memo to employees.
The economy lost more than 8 million jobs during the recession that began in December 2007, the biggest employment slump in the post-World War II era.
Recent economic reports indicated “a slowing in the pace of recovery in output and employment in recent months,” according to minutes of the Fed’s Aug. 10 meeting released this week. Policy makers last month restated a pledge to keep interest rates near zero for an extended period and announced additional steps to shore up growth.