More Americans than forecast filed applications for unemployment benefits last week, a sign that progress in the labor market is faltering amid a slowing economy.
Jobless claims were little changed at 374,000 in the week ended Aug. 25, matching the upwardly revised figure from the prior week, the Labor Department reported today in Washington. The median forecast of 50 economists surveyed by Bloomberg News called for 370,000. The four-week moving average, a less volatile measure, climbed to a six-week high.
Companies will probably remain concerned about the possibility that taxes will rise and government spending will be cut unless lawmakers act by January. Fiscal turmoil in the 17-member euro area and a slowdown in China may also prompt employers to keeping payrolls lean.
Claims have “moved sideways most of the year,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York. “Hirings are what’s lacking at this point.”
U.S. stocks retreated, trimming the third straight monthly advance for the benchmark Standard & Poor’s 500 Index, as reports from Europe, Japan and South Korea intensified concern the global economy is cooling. The S&P 500 fell 0.8 percent to 1,399.18 at 10:29 a.m. in New York.
Estimates in the Bloomberg survey ranged from 363,000 to 380,000. The Labor Department revised the previous week’s figure up from an initially reported 372,000.
Other reports today showed consumer spending climbed in July for the first time since April and an index of consumer confidence held close to a seven-month low last week.
Purchases increased 0.4 percent after being little changed in June, Commerce Department figures showed today in Washington. The median estimate of 76 economists surveyed by Bloomberg called for a 0.5 percent gain in so-called nominal sales. Incomes climbed 0.3 percent for a third month.
A spokesman for the Labor Department said there was nothing unusual in the jobless claims data last week.
Employers added 163,000 workers in July, the biggest gain since February, according to the Labor Department jobs report issued earlier this month. At the same time, the unemployment rate climbed to a five-month high of 8.3 percent.
Unemployment has been above 8 percent since February 2009, the longest stretch in the post-World War II era.
Today’s report showed the number of people continuing to receive jobless benefits declined by 5,000 in the week ended Aug. 18 to 3.32 million.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Those who have used up their traditional benefits and now are collecting emergency and extended payments decreased by about 52,150 to 2.28 million in the week ended Aug. 11.
The unemployment rate among people eligible for benefits held at 2.6 percent, today’s report showed.
Twenty-two states and territories reported an increase in claims, while 31 reported a decrease. State data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and tend to fall as companies accelerate hiring.
Federal Reserve Chairman Ben Bernanke is scheduled to speak tomorrow in Jackson Hole, Wyoming, where he may discuss the economic outlook. Policy makers have said they are prepared to provide new stimulus “fairly soon” unless there is evidence of “substantial and sustainable” improvement in the recovery, according to minutes of the Federal Open Market Committee’s July 31-Aug. 1 meeting. Policy makers are set to meet again in September.
“When people get nervous about the macroeconomic environment, they slow down spending,” said William Sullivan, president and chief executive officer of Agilent Technologies Inc. in Santa Clara, California.
“It’s not supply and demand. It’s not a normal recession,” Sullivan said on an August 15 earnings call. “Given the issues of the euro and what’s going to happen and then you have this financial cliff in the U.S. in January, complete political disagreement in Washington, people are really nervous.”
“If somebody agreed tomorrow to say that Europe is going to do a euro bond and the U.S. was not going to have a financial cliff in January, you would have a different outlook,” Sullivan said. “It’s as simple as that.”