Unemployment aid applications stuck at high level
WASHINGTON – The number of people seeking unemployment benefits hardly changed for a second straight week, stuck at a high level that points to a slowing job market.
Weekly unemployment benefit applications ticked up 1,000 to a seasonally adjusted 427,000 last week, the Labor Department said.
It marked the ninth straight week in which applications have been above 400,000. That trend represents a setback after applications had been declining all winter.
Applications had fallen in February to 375,000, a level that signals sustainable job growth. They stayed below 400,000 for seven of nine weeks. But applications surged in April to 478,000 — an eight-month high — and they have been stuck above 400,000 since then.
The report suggests that employers have lost some confidence in the economic recovery, said Neil Dutta, an economist at Bank of America Merrill Lynch. He pointed to higher gas prices, the Japan crises that have led to a parts shortage and the inability of Congress to agree on a plan to raise the $14.3 trillion debt ceiling as the main reasons. He expects employers will likely add about 150,000 jobs per month for the next few months, a level that would barely reduce the unemployment rate.
The growth in unemployment benefit applications is one of many signs that the economy has faltered from earlier this year, when hiring was picking up and many economists expected growth to accelerate.
Hiring slowed sharply in May. Employers added only 54,000 net new jobs. That was much slower than the average gain of 220,000 per month in the previous three months. The unemployment rate rose to 9.1 percent.
The four-week average for unemployment benefit applications, a less volatile measure, dipped to 424,000, its third straight drop. Still, the level is higher than at the beginning of the year.
The total number of people receiving unemployment benefits fell 71,000 to about 3.7 million for the week ending May 28. That's one week behind the applications data.
But that doesn't include the millions of people receiving extended benefits under emergency programs set up during the recession. All told, 7.6 million people obtained unemployment benefits in the week ending May 21, the latest data available. That's a drop of 90,000 from the previous week. Some of those no longer receiving benefits may have gotten jobs, but many likely used up all the benefits available to them.