May 31 (Bloomberg) -- The number of Americans applying for unemployment insurance payments rose last week to a one-month high, a sign that progress in reducing joblessness may be stalling.
First-time claims for jobless benefits increased by 10,000 to 383,000 in the week ended May 26 from a revised 373,000 the prior week, the Labor Department said today. The initial claims exceeded the median estimate of 370,000 in a Bloomberg News survey of economists. The number of people on unemployment benefit rolls dropped.
Increased firings weaken the prospects for accelerating job growth, which in turn could weigh on consumer spending, the biggest part of the economy. Companies may be reluctant to add to payrolls as the pace of growth slows in the U.S. and in other parts of the world.
“Businesses have exhibited an extreme degree of caution in terms of capital investment as well as hiring,” said Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut. “Things are just kind of slogging along.”
Stock futures trimmed earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in June rose 0.1 percent to 1,310.30 at 8:33 a.m. in New York. The benchmark Treasury 10-year note yield fell two basis points, or 0.02 percentage point, to 1.60 percent at 8:40 a.m. New York time.
Estimates for first-time claims ranged from 364,000 to 377,000 in the Bloomberg survey of 48 economists. The Labor Department initially reported the prior week’s applications at 370,000. Last week’s claims were the highest since 392,000 in the week ended April 21.
The four-week moving average, a less-volatile measure, rose to 374,500 from 370,750.
The number of people continuing to collect jobless benefits dropped by 36,000 in the week ended May 19 to 3.24 million. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.6 percent in the week ended May 19, today’s report showed. Thirty-four states and territories reported an increase in claims, while 19 reported a decrease.
Initial jobless claims reflect weekly firings and tend to fall as job growth, measured by the monthly non-farm payrolls report, accelerates.
A report from the Labor Department tomorrow may show the world’s largest economy added about 150,000 jobs in May, compared with a gain of 115,000 the previous month, according to the median estimate of economists surveyed by Bloomberg. The unemployment rate probably held at 8.1 percent, a three-year low, economists said.
Some companies continue to trim staff levels. United Technologies Corp.’s Pratt & Whitney unit said May 24 it’s cutting 300 salaried jobs, including 200 in its home state of Connecticut.
The maker of engines for business and commercial airplanes “continuously assesses staffing levels to ensure they are in line with current business and economic conditions,” Bryan Kidder, a Pratt & Whitney spokesman, said in an e-mailed statement. “These decisions are necessary to carefully manage our cost structure while continuing to invest in our future.”
Pratt & Whitney employs about 36,000 people worldwide, according to its website.
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