WASHINGTON, Aug 20 – New claims for US unemployment benefits rose unexpectedly for the second consecutive week, the government said Thursday, raising concerns that soaring jobless numbers could stifle recovery from prolonged recession.
The Labor Department said that initial jobless claims increased by 15,000 to 576,000 in the week to August 15, which happens to be the survey week for the monthly non-farm payrolls report, seen as one of the best indicators of economic momentum.
Most analysts had expected initial claims to fall to 550,000 in the past week — the previous week\’s revised figure was 561,000 — amid increasing signs that the recession since December 2007 was easing.
The four-week moving average, which smoothes out week-to-week volatility, was 570,000, an increase of 4,250 from the previous week\’s revised average of 565,750, the department said.
The total number of Americans receiving unemployment benefits also continued to mount.
According to the department, the number for seasonally adjusted insured unemployment, or continuing claims, during the week ending August 8 was 6.24 million, an increase of 2,000 from the preceding week.
Two weeks after the government announced that the jobless rate had fallen one-tenth of a point to 9.4 percent in July on narrowing job losses, analysts said the new jobless numbers were worrying.
"These are some pretty awful initial claims numbers when you stop to consider that they are still well north of the peak seen in the last two recessions, which was in the 400,000 to 450,000 range," said Patrick O\’ Hare of Briefing.com.
He warned that a protracted period of high unemployment or underemployment "remains a key risk to the growth outlook that has seemingly gone unappreciated in the latest" stock market rally.
"If this latest increase is any indication, layoffs may not be moderating as quickly as previously thought," said Andrew Gledhill of Moody\’s Economy.com.
Since March, initial claims had come down from a high of 674,000 but Gledhill said that to reach a stable labour market, they would have to hit around 350,000.
The Labour Department\’s latest monthly labour report on August 7 said the unemployment rate fell to 9.4 percent in July as job losses narrowed to 247,000 from 443,000 in June.
President Barack Obama had jumped on the data to suggest his administration had saved the US economy from catastrophe and that the worst of the recession might be over.
But some analysts are already indicating higher jobless numbers for August.
"The level for claims in the survey week for the non-farm jobs report is going to be higher in August than it was in July. That is not usually a good sign if you are looking for the pace of job losses to slow in August," said Robert Brusca of FAO Economics.
Analysts have warned the jobless rate could hit 10 percent by the end of the year even with an improving economy.
Meanwhile, a forward-looking US economic index rose for the fourth consecutive month in July, the Conference Board, a business group, said Thursday in another sign that the economy will likely begin recovering soon.
The government estimates that the US economy contracted 1.0 percent in the second quarter from a 6.4 percent contraction in the first quarter and a drop of 5.4 percent in the fourth quarter of 2008.
Many economists have forecast positive growth for the third quarter.