- Bloomberg -
More Americans than anticipated filed applications for unemployment benefits last week, a sign firings remain elevated even as the economy is expanding.
Initial jobless claims dropped by 3,000 to 456,000 in the week ended June 5, Labor Department figures showed today in Washington. Economists surveyed by Bloomberg News projected 450,000 claims, according to the median forecast. The number of people receiving unemployment insurance fell to the lowest level since 2008, while those getting extended payments climbed.
While payrolls rose for a fifth month in May, hiring by companies was less than forecast, underscoring Federal Reserve Chairman Ben S. Bernanke’s comments yesterday that there will be “only a slow reduction” in the unemployment rate. Job gains are needed to spur consumer spending, which accounts for 70 percent of the economy, and ensure a sustained expansion.
“The labor market is not as healthy as it should be at this stage of the recovery,” said John Herrmann, senior fixed- income strategist at State Street Global Markets LLC in Boston, who forecast claims at 453,000. “Hiring isn’t ramping up and this means there are downside risks to growth, income and consumption.”
The U.S. trade deficit widened in April to the highest level in more than a year as exports dropped more than imports, a report from the Commerce Department showed. The gap grew 0.6 percent to $40.3 billion, the most since December 2008.