June 21 (Bloomberg) -- More Americans than forecast filed applications for unemployment benefits last week, indicating the labor market continues to struggle.
Jobless claims decreased by 2,000 to 387,000 in the week ended June 16, Labor Department figures showed today in Washington. The median forecast of 45 economists surveyed by Bloomberg News called for 383,000. The four-week average, a less volatile measure, climbed to the highest of the year.
The level of dismissals may raise concern the slowdown in payrolls reported in the past few months will be prolonged, limiting consumer spending. Federal Reserve policy makers yesterday expanded a program to replace short-term bonds with longer-term debt in a bid to spur growth and trim a jobless rate that’s exceeded 8 percent for 40 consecutive months.
“Momentum is slowing,” said Ryan Wang, an economist at HSBC Securities USA Inc. in New York, the only economist in the Bloomberg survey to correctly forecast the level of claims. “Companies have curtailed demand for labor. This means less income growth. That’s a restraint on consumer spending.”
Stock-index futures were little changed after the report. The contract on the Standard & Poor’s 500 Index maturing in September rose 0.1 percent to 1,351.8 at 8:41 a.m. in New York.
Estimates in the Bloomberg survey ranged from 371,000 to 390,000. The Labor Department revised the previous week’s figure up to 389,000 from an initially reported 386,000.
Trending Up
The four-week moving average increased to 386,250, the highest since the week ended Dec. 3, from 382,750.
Last week included the 12th of the month, which coincides with the period the Labor Department uses in its survey of employers to calculate monthly payroll growth. The four-week average for the May survey week was about 10,000 lower, indicating little progress this month. The employment report for June will be released on July 6.
Payrolls in May expanded by 69,000 workers, the slowest pace in a year, and have cooled each month since January. The jobless rate, which climbed to 8.2 percent in May, has been stuck above 8 percent since February 2009.
Today’s report showed the number of people continuing to receive jobless benefits was little changed at 3.3 million in the week ended June 9.
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 42,400 to 2.64 million in the week ended June 2.
The unemployment rate among people eligible for benefits was at 2.6 percent for a 13th consecutive week, according to today’s report.
Forty-four states and territories reported an increase in claims, while 9 reported a decrease. 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 non-farm payrolls report -- accelerates.
Fed officials yesterday said they’ll expand Operation Twist, a program to replace short-term bonds with longer-term debt, by $267 billion through the end of 2012. They left unchanged their view that economic conditions will probably warrant keeping interest rates “exceptionally low” at least through late 2014, and said they are “prepared to take further action as appropriate.”
Fed’s View
“Growth in employment has slowed in recent months, and the unemployment rate remains elevated,” the Fed said in its statement. “Household spending appears to be rising at a somewhat slower pace than earlier in the year.”
Policy makers see 1.9 percent to 2.4 percent growth in 2012, down from their April forecast of 2.4 percent to 2.9 percent, according to Fed projections issued yesterday. They forecast the unemployment rate will end the year at 8 percent to 8.2 percent, up from April’s 7.8 percent to 8 percent estimate.
Time Inc. plans to cut editorial jobs at Sports Illustrated through voluntary buyouts and may eliminate some positions if not enough people take an exit package. The buyouts are being offered through June 21.
“Everything is about money eventually and being more efficient,” Terry McDonell, editor of Time Inc.’s Sports Group, said in a telephone interview last week. Although Sports Illustrated, which has 210 editorial employees, is “very profitable,” the reductions will allow the magazine to become even more so, he said.
Other companies scaling back include FedEx Corp. The operator of the world’s largest cargo airline this week said it is restructuring its express business and retiring 24 jet freighters.
