Jobless claims up for week, down on average
Job seekers wait Wednesday to meet potential employers at a sales and management career fair in Westminster, Colo. Claims for unemployment insurance rose during the past week, but the four-week average dipped. (July 20, 2011) Credit: Getty Images
More people applied for unemployment benefits last week, evidence that layoffs are rising and the job market is weak.
Applications for unemployment benefits rose by 10,000 to a seasonally adjusted 418,000, the Labor Department said Thursday. The four-week average, a less volatile measure, dipped to 421,250.
Applications have topped 400,000 for 15 straight weeks, a sign of sluggish hiring. Applications had fallen in February to 375,000, a level that signals healthy job growth. They stayed below 400,000 for two months. But applications surged to an eight-month high of 478,000 in April and have declined slowly since then.
Consumers have pulled back on spending this year, besieged by high unemployment, stagnant wages, and high gas prices. That has slowed growth.
Unemployment applications "remain stubbornly elevated," said Yelena Shulyatyeva, U.S. economist at BNP Paribas. "A lot of structural factors are still affecting the economy," she added, such as the weak housing market and continuing layoffs by state and local governments.
The economy expanded only 1.9 percent in the January-March quarter, and some analysts forecast even slower growth for the April-June period.
Employers have responded by cutting back sharply on hiring. The economy added only 18,000 net jobs in June, the second straight month of dismal job gains. That's far below the average of 215,000 net jobs per month the economy averaged from February through April.
The unemployment rate rose to 9.2 percent last month, the highest this year.
Some companies are cutting jobs. Cisco Systems Inc., the world's largest maker of computer-networking gear, on Monday said that it is eliminating 6,500 positions, or about 9 percent of its worldwide workforce of 73,000.
Layoffs rose to their highest level in nine months in May, according to a separate Labor department report last week.
Economists have attributed much of the slowdown to temporary factors, such as a spike in gas prices this spring. Manufacturing output also declined after Japan's March 11 earthquake disrupted global supply chains.
Many economists expect growth to pick up later this year as those factors fade. Gas prices, for example, averaged $3.68 a gallon on Wednesday, down from their peak of nearly $4 in early May.
