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 percent of the world’s largest economy. Federal Reserve officials said the jobless rate “remains elevated” at 9 percent, 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.
The U.S. economy, the world’s largest, expanded at a 1.8 percent annual rate in the first three months of this year, Commerce Department figures showed in Washington. The revised rise in gross domestic product was the same as estimated last month and compared with a 3.1 percent gain in the prior quarter. The median forecast of economists surveyed by Bloomberg called for a 2.2 percent increase.
Stock-index futures trimmed gains after the reports. The contract on the Standard & Poor’s 500 Index expiring in June rose less than 0.1 percent to 1,317.7 at 8:51 a.m. in New York. Treasuries rose, pushing down the yield on the benchmark 10-year note to 3.12 percent from 3.13 percent late yesterday.
The four-week moving average, a less volatile measure than the weekly figures, fell to 438,500 last week from 440,250.
The number of people continuing to receive jobless benefits dropped by 46,000 in the week ended May 14 to 3.69 million, the lowest in a month.
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 63,215 to 4.05 million in the week ended May 7.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 2.9 percent in the week ended May 14 from 3 percent.
Forty states and territories reported a decrease in claims, while 13 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 payrolls report -- accelerates.
Some companies are already making plans to expand payrolls further in 2012. General Motors Co. said this week it will invest $69 million and add 2,500 jobs to start making new models at the Detroit plant that builds the Chevrolet Volt plug-in hybrid as the automaker boosts U.S. production.
Employment expanded last month by the most since May 2010, even as the jobless rate climbed to 9 percent, Labor Department data showed. Labor market conditions had “continued to improve, albeit gradually,” Fed officials said in minutes of their April 26-27 meeting released last week.
At the same time, “the unemployment rate remains elevated,” central bankers said.