The number of US workers filing initial claims for unemployment aid rose for a third straight week last week, according to a government report today showing unexpected weakness in the job market.
First-time filings for state jobless benefits rose 3,000 to 422,000 bringing claims to their highest level since early July and defied predictions on Wall Street for a drop to 400,000.
"It's surprisingly bad news," Moody's Investors Service chief economist Mr John Lonski said. "This tells us that the very good news we had on consumer spending for the months of July and August will not last unless employment growth returns." Further underscoring the evident weakness, a four-week moving average of claims, climbed by 4,500 to 407,250, its highest level in six weeks.
Numerous signs have suggested the US economy is now growing robustly, but companies have continued to lay off workers and hold the line on hiring.
A report last week showing employers cut 93,000 workers from their payrolls in August surprised economists, who had thought an unusually long period of labor market weakness was finally starting to wane.
August's job hemorrhaging brought the job-loss toll since the US economy fell into recession in early 2001 to 2.8 million, including 1.1 million since the recession ended 21 months ago.
Corporate announcements underscored the tough time workers face. International Paper said it was letting 3,000 workers go, 3Com shed 1,000 jobs yesterday including 650 in Ireland and Levi Strauss said it was cutting 650 jobs.