July 14, 2024

Jobless Claims Dip Lower, But Show Less Momentum

The tepid fall in jobless claims signals companies may also be looking to limit hiring, raising the expectation that employment data due Friday will show that payroll gains moderated in May. Slowing job growth may cause households to further curb spending, which accounts for about 70 percent of the American economy.

“The job market has clearly lost momentum,” said John Herrmann, a senior fixed-income strategist at State Street Global Markets in Boston. “Jobless claims remain elevated, and payrolls growth for May could come in at a level that’s worrisome. The gains in confidence may be short-lived. From here on, confidence surveys may begin to reflect the broader sense of uncertainty in the economy, the labor market and the stock market.”

Stocks fell on concern the economic recovery was slowing. The forecast for jobless claims was based on a survey of 50 economists. Estimates ranged from 400,000 to 440,000. The Labor Department revised the previous week’s figure to 428,000 from the 424,000 initially reported.

Among the economists surveyed by Bloomberg, the median forecast was that payrolls grew by 170,000 workers in May. Payrolls increased by 244,000 in April.

A report released Wednesday from ADP Employer Services showed companies added 38,000 workers last month, the fewest since September and less than the median estimate in a Bloomberg survey.

“The labor market is a little less robust than it was,” said Michael Feroli, chief United States economist at JPMorgan Chase in New York. “This is the eighth consecutive week of claims above 400,000, so it doesn’t look like the move up was an aberration.”

Robert Brusca, president of Fact Opinion Economics in New York, said, “There is nothing in this weekly survey that gives us any confidence things are getting better. There is really not much improvement in the economy.”

Other reports from Thursday showed worker productivity slowed in the first quarter and orders to factories dropped in April.

The measure of employee output per hour increased at a revised 1.8 percent annual rate after a 2.9 percent gain in the prior three months, the Labor Department said. Labor costs climbed at a 0.7 percent rate after dropping 2.8 percent the prior quarter.

Demand for manufactured goods dropped 1.2 percent in April, the most since May 2010, after climbing 3.8 percent the prior month, figures from the Commerce Department showed.

Initial jobless claims reflect weekly firings and tend to rise as job growth — measured by the monthly nonfarm payrolls report — decelerates.

Lower gasoline prices may be giving households some relief. The average price of a gallon of regular gasoline nationally dropped to $3.79 on May 29, down from $3.84 a week earlier, according to AAA, the nation’s largest auto club. It reached $3.99 on May 4, the highest since July 2008.

Article source: http://feeds.nytimes.com/click.phdo?i=cbd4c6c0ae3759e7e39e70a06227cb1a

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