THE NUMBER of US workers filing new claims for unemployment insurance unexpectedly rose last week to its highest level in close to six months, a fresh signal of a weak jobs market.
The number of new claims for jobless benefits rose 2,000 to 484,000 in the week ended August 7th, the second straight increase, the Labor Department said. Economists had expected claims to edge down to 469,000.
“This is not a good number,” said John Brady, an analyst at MF Global in Chicago. “Claims are going the wrong way. That has the market concerned.”
US stocks opened lower on both the data and a disappointing revenue forecast from tech bellwether Cisco Systems, while US Treasury debt prices pared losses and the dollar trimmed gains against the yen.
The data comes two days after the Federal Reserve downgraded its assessment of the economy’s health and said it would take steps to ensure its support for the fragile recovery does not wane.
The Fed’s downbeat view, signs growth in China was slowing and trade and inventory data that led analysts to sharply curb their view of how strong the US economy was in the second quarter had combined on Wednesday to erase the year’s gains in US stocks.
Data for the US has been decidedly weak over the past couple of months, with private-sector job growth lagging behind expectations and the unemployment rate stuck at 9.5 per cent. That has fed concerns that the economy could be at risk of a renewed recession, or face a debilitating bout of deflation as the weak jobs market pressures income and prices.
An NBC News/Wall Street Journal poll released on Wednesday showed economic pessimism was rising, a bad sign for incumbent lawmakers facing voters in November.
The poll found that almost two-thirds of Americans believe the US economy will worsen before it gets better, up from the 53 per cent who felt that way in January. – (Reuters)
