Applications for U.S. unemployment benefits unexpectedly rose last week, a sign companies remain cautious about hiring as economic growth slows.
Initial jobless claims increased by 12,000 to 465,000 in the week ended Sept. 18, Labor Department figures showed today in Washington. The total number of people receiving unemployment insurance declined, while those getting extended payments rose.
Employers that have slowed firings since the recession ended in June 2009 haven’t stepped up the pace of hiring enough to reduce an unemployment rate hovering near a 26-year high. A lack of job growth may signal consumer spending will be restrained in the second half of the year, economists said.
“The economic recovery remains painfully slow and the proof of this is companies are still reluctant to hire,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Those who lost their jobs in this recession will have to wait because the economy’s wheels are not turning fast enough to employ them.”
Futures on the Standard & Poor’s 500 Index expiring in December extended losses after the report, declining 0.9 percent to 1,119.50 at 8:57 a.m. in New York.
First-time claims for jobless benefits were projected to hold at 450,000 last week, according to the median forecast of 47 economists in a Bloomberg News survey. Estimates ranged from 440,000 to 475,000. The Labor Department revised the prior week’s figure to 453,000.
The four-week moving average, a less volatile measure than the weekly figures, dropped to 463,250 last week from 466,500, the fourth straight week of declines, today’s report showed.
The number of people continuing to receive jobless benefits fell by 48,000 in the week ended Sept. 11 to 4.49 million. They were forecast to drop to 4.47 million, according to economists surveyed by Bloomberg.
The continuing claims figure does not include the number of Americans receiving extended and emergency benefits under federal programs. Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by about 208,000 to 5.17 million in the week ended Sept. 4.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, declined to 3.5 percent in the week ended Sept. 11 from 3.6 percent the prior week.
Forty-four states and territories reported a decline in claims, while nine reported an increase in the ended Sept. 11.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Private employers in August added 67,000 workers while total payrolls fell by 54,000, the Labor Department said earlier this month. Unemployment rose to 9.6 percent last month, and economists surveyed by Bloomberg News forecast joblessness will stay near that level for the rest of the year.
Some companies are still firing workers while others are beginning to hire.
Textron Inc., a Providence, Rhode Island-based maker of airplanes, said Sept. 21 it is cutting 700 jobs and adjusting production schedules at its Cessna unit because of continued weakness in new orders.
“While we are seeing solid performance in most of our other businesses, we have not yet seen a discernable improvement in business-jet order activity,” Chief Executive Officer Scott Donnelly said in a statement.
Indianapolis-based appliance and electronics retailer hhgregg Inc. this week announced it was seeking to fill 50 sales positions each at new stores in Manassas, Virginia, and Erie, Pennsylvania.
President Barack Obama this month proposed a package of $180 billion in business tax breaks and infrastructure spending to boost job growth. That would come on top of the $814 billion in stimulus measures enacted last year that the administration said in July would have saved or created 3.5 million jobs by the end of this year.
Polls reflect diminishing support for Obama and his Democratic party ahead of midterm elections in November as growth slows and employment stagnates. A poll by Quinnipiac University taken Aug. 31 to Sept. 7 showed 56 percent of voters disapproved of Obama’s handling of the economy.