More Americans unexpectedly applied for jobless benefits last week, a sign the labor market recovery may be slowing.Initial jobless claims increased by 13,000 to 472,000 in the week ended June 26, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance rose, while those getting emergency benefits dropped after Congress failed to act on extending the legislation.
The jump in applications raises the risk that the turmoil in financial markets brought on by the European debt crisis is leading to additional cutbacks in staff. The Labor Department tomorrow may report the U.S. lost jobs in June for the first month this year, reflecting a drop in temporary federal workers who helped to conduct the decennial census.
“Initial claims for unemployment insurance benefits are moving in the wrong direction,” Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “Jobless claims are further from levels typically viewed as signaling rising payrolls.”
Economists forecast jobless applications would fall to 455,000 from an initially reported 457,000 for the prior week, according to the median of 46 projections in a Bloomberg survey. Estimates ranged from 440,000 to 475,000.
This is the time of year when states cut back on payrolls in schools, a Labor Department spokesman said. The jump in claims may reflect even larger-than-typical reductions.
Here's a chart of the 4-week moving average. It doesn't include today's numbers, but that's not important.
This number showed continued improvement for the last half of last year. it has stalled for the entirety of this year. No number moves in one direction completely. Hence, some stalling of the number is to be expected. However, we are now beyond the stalling phase. In short, there is a serious problem that is not being addressed.
This number has been concerning me for about three months. It has now crossed the point from outlier to deep concern about the second half of this year. With the exception of last month (where the primary driver of job growth was census hires) , the establishment survey has shown continued improvement. My concern is that number and record of improvement is in serious jeopardy.
