More Americans than projected filed applications for unemployment benefits last week, which may raise concern the slowdown in economic growth is prompting an increase in firings.
Jobless claims jumped by 32,000 to 360,000 in the week ended May 11, exceeding all forecasts in a Bloomberg survey of economists and the most since the end of March, Labor Department figures showed today in Washington. A Labor Department spokesman said no state provided information explaining the surge in applications which was the biggest since the aftermath of superstorm Sandy in November.
Job dismissals need to keep declining to lay the ground for a pickup in hiring once companies see growth in sales. The lack of bigger gains in employment, at a time Americans are faced with a higher payroll tax, will make it harder for households to sustain spending, the biggest part of the economy.
‘It’s possible that we could get a little bit more firing as the economy slows in the second quarter,” said Gennadiy Goldberg, a U.S. strategist at TD Securities Inc. in New York. “Volatility aside, the layoff part of the equation still looks positive. It looks more like employers aren’t very keen to fire workers but they are keen to reduce hours.”
The median forecast of 50 economists surveyed by Bloomberg called for a rise to 330,000. Estimates ranged from 315,000 to 355,000. The Labor Department revised the previous week’s figure to 328,000 from an initially reported 323,000.
The four-week moving average, a less volatile measure than the weekly figures, rose to 339,250 last week from 338,000.
The cost of living in the U.S. fell in April for a second month, the first back-to-back declines in inflation since late 2008, as fuel costs retreated, another Labor Department report showed today.
The consumer-price index decreased dropped 0.4% after declining 0.2% in March. Economists surveyed by Bloomberg projected a 0.3% decrease, according to the median estimate. The so-called core price measure, which excludes more volatile food and energy costs, increased 0.1%, less than projected.
Housing starts fell more than forecast in April to a five- month low, indicating a pause in the industry’s progress as builders slowed work on apartments, a Commerce Department report also showed today. At the same time, building permits surged to an almost five-year high.