WASHINGTON - The number of people filing new claims for jobless benefits jumped last week after three straight declines, another sign that the pace of layoffs has not slowed.
Initial claims for jobless benefits rose by 12,000 to a seasonally adjusted 472,000, the Labor Department said yesterday. It was the highest level in a month and overshadowed a report that showed consumer prices remain essentially flat.
If layoffs persist, there's a concern that the June employment numbers may show a decline in private-sector jobs after five straight months of gains, said Jennifer Lee, an economist with BMO Capital Markets. "We've definitely seen the economic recovery hit a wall," she said.
First-time jobless claims have hovered near 450,000 since the beginning of the year after falling steadily in the second half of 2009. That has raised concerns that hiring is lackluster and could slow the recovery.
The four-week average for unemployment claims, which smooths volatility, dipped slightly to 463,500. That's down by 3,750 from the start of January.
A separate Labor report said consumer prices fell for the second straight month. The 0.2 decline in the Consumer Price Index was pulled down by falling energy prices - most notably a 5.2 percent drop in gasoline prices.
But core consumer prices, which strip out volatile energy and food, edged up 0.1 percent in May, after being flat in April. Core prices are up only 0.9 percent in the past year - below the Fed's inflation target.
Additionally, the Commerce Department said Thursday that the broadest measure of U.S. trade rose during the first quarter to the highest point in more than a year. Much of the widening deficit was due to higher prices on imported oil during the first three months of the year. Those prices have since come down.
And The Conference Board, a Manhattan-based private research group, said its gauge of future economic activity rose 0.4 percent in May, signaling slow growth in the U.S. economy through the fall.