Call it the stubborn recession.
The number of Americans making first-time claims for unemployment insurance rose unexpectedly last week, the US Department of Labor reported Thursday. Initial claims climbed 15,000 to reach a three-week high of 576,000.
Analysts had expected that the number would fall, marking the third time in two weeks that an economic report was far gloomier than the consensus forecast.
The closely watched four-week moving average of initial jobless claims – which smooths out the ups and downs of the weekly number – also climbed to a high not seen since mid-July.
These numbers may help explain recent dour reports about consumer spending and sentiment. With the US employers still cutting an unusually high number of jobs, employees aren't all that ready to start spending again.
The rise in jobless claims "was a surprise," said Richard Moody, director of Forward Capital Group, in an interview. Counting those drawing extended and emergency benefits, "you've got roughly 9 million people drawing unemployment insurance. That's one reason consumer spending is where it is right now."
If jobless claims don't fall, August's four-week average would top July's total, perhaps causing August unemployment to rise and further sapping confidence in the recovery.
"The pace of future declines in claims and the message this sends regarding payroll employment will be critical," wrote Joshua Shapiro, an economist at MFR Inc., in a written analysis. "We expect the improvement to be considerably more gradual than that seen at the beginning of the move."
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