More Americans than forecast filed applications for unemployment benefits last week, indicating little progress in the labor market.
Jobless claims fell by 1,000 to 428,000 in the week ended June 25, Labor Department figures showed today in Washington. The median forecast of economists in a Bloomberg News survey called for a drop to 420,000. The number of people on unemployment benefit rolls and those getting extended payments declined.
Weaker demand in recent months has prompted some companies to trim their workforces, adding to concern a cooling labor market will further restrain consumer spending that accounts for about 70 percent of the economy. Federal Reserve officials last week retained record monetary stimulus to help the economy withstand a “temporary” slowdown in growth.
“The labor market is not making any material improvement,” said John Herrmann, senior fixed-income strategist at State Street Global Markets LLC in Boston, who projected 429,000 claims in the latest week. “Consumer spending will be more constrained.”
Estimates in the Bloomberg survey of 43 economists ranged from 410,000 to 435,000. Stock-index futures maintained gains after the report. The contract on the Standard & Poor’s 500 Index expiring in September rose 0.2 percent to 1,307 at 8:32 a.m. in New York.
Today’s data showed the four-week moving average, a less volatile measure than the weekly figures, was little changed at 426,750 last week after 426,250 the previous week.
The number of people continuing to receive jobless benefits dropped by 12,000 in the week ended June 18 to 3.7 million. They were forecast to decrease to 3.69 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 27,000 to 3.93 million in the week ended June 11.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 2.9 percent from 3 percent in the prior week, today’s report showed.
Thirty-six states and territories reported a decline in claims, while 17 reported an increase. These data are reported with a one-week lag.
Sealy Corp., a Trinity, North Carolina-based bedding manufacturer, is among companies seeing a slowdown in demand, in part reflecting limited job growth.
‘Softening’ in Economy
“Our retailers have seen a little bit of softening in the economy,” Lawrence Rogers, chief executive officer, said in a conference call with investors on June 28. “The market is just absorbing some of the high fuel costs and the inflation in food, and just the general unemployment numbers.”
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Payrolls grew by 54,000 in May, the least in eight months. The lack of a pickup in the labor market and an economy that’s slowing reinforce the decision of Fed policy makers to keep interest rates close to zero for an extended period.
“Recent labor market indicators have been weaker than anticipated,” central bankers said in a statement on June 22 after a two-day meeting. “The slower pace of the recovery reflects in part factors that are likely to be temporary,” such as supply chain disruptions stemming from the Japanese disaster in March.