(Bloomberg News) More Americans than forecast filed applications for unemployment benefits during the holiday-shortened week, signaling limited recovery in the labor market.
Jobless claims climbed by 6,000 to 402,000 in the week ended Nov. 26 that included the Thanksgiving holiday, Labor Department figures showed today in Washington. The median forecast of 43 economists in a Bloomberg News survey called for a drop to 390,000. The number of people on unemployment benefit rolls and those getting extended payments increased.
Some companies are still trimming staff and others are reluctant to add workers until demand picks up and there's more clarity on tax breaks due to expire at year-end. Faster hiring is needed to spur consumer spending, which accounts for about 70 percent of the economy, and reduce a jobless rate stuck near 9 percent that's a concern for Federal Reserve officials.
"Companies are still in a mode of hiring based on absolute need," said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit. "They're not adding a whole lot of workers for future growth. Employers are waiting to see what happens with the payroll tax cut."
Jobless benefits applications were projected to decrease from 393,000 initially reported for the prior week, according to the survey median. Estimates ranged from 380,000 to 415,000. The Labor Department revised the prior week's figure up to 396,000.
Stock-index futures were little changed after the report. The contract on the Standard & Poor's 500 Index expiring this month declined 0.1 percent to 1,244.5 at 8:33 a.m. in New York.
A Labor Department spokesman said there was nothing unusual in the state level data last week. Because of the holiday, the seasonal-adjustment factors projected claims would drop by about 75,000, instead they fell by about 70,000, pushing up the adjusted reading, the spokesman said. It's often difficult to account for the effect of holidays on weekly claims.
Today's data showed the four-week moving average, a less volatile measure than the weekly figures, rose to 395,750 last week from 395,250, which was a seven-month low.
The number of people continuing to receive jobless benefits climbed by 35,000 in the week ended Nov. 19 to 3.74 million.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.