Jobless claims in U.S. increase to highest level in a month

Extended Payments

Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 48,300 to 2.33 million in the week ended Aug. 4.

The unemployment rate among people eligible for benefits held at 2.6 percent, today’s report showed.

Thirty states and territories reported a decline in claims, while 22 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 non-farm payrolls report -- accelerates.

Staples Inc. and Lowe’s Cos. are among companies signaling concern about the labor market outlook.

“We further reduced head count during the second quarter, which is now down nearly 15 percent over the past year,” Michael Miles, president and chief operating officer at Staples, said on an Aug. 15 earnings call. “The sales environment remains extremely difficult.”

Lowe’s, the Mooresville, North Carolina-based home improvement retailer, could benefit from a stronger recovery in housing even as hiring stagnates.

Economic Challenges

“Obviously, unemployment is a still a challenge and the overall macro environment are still a challenge and a headwind going forward,” Robert Niblock, chairman and chief executive officer of Lowe’s, said on an Aug. 20 earnings call. “We don’t know how demand will be impacted by that but certainly we think housing is nearing the bottom of the cycle.”

Many Federal Reserve policy makers said additional stimulus probably will be needed soon unless the economy shows signs of a durable pickup, according to minutes of their most recent meeting released yesterday.

“Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” according to the record of the Federal Open Market Committee’s July 31- Aug. 1.

Fed Chairman Ben S. Bernanke could signal new measures to support the expansion in a speech next week.

Policy makers “need to do something to counteract this sluggishness in the intentions to expand,” Yelena Shulyatyeva, an economist at BNP Paribas in New York, said before today’s claims report.

Bloomberg News

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