RTTNews - Indicating continued weakness in the labor market, the Labor Department released a report on Thursday showing that first-time claims for unemployment benefits unexpectedly increased in the week ended June 20th.
The report showed that initial jobless claims rose to 627,000 from the previous week's revised figure of 612,000. Economists had expected jobless claims to edge down to 600,000 from the 608,000 originally reported for the previous week.
With the unexpected increase, jobless claims remained above the 600,000 level for the twenty-first consecutive week.
The Labor Department said that the increase was partly due to an increase in layoffs in the education services sector due to the end of the school year.
Peter Boockvar, equity strategist at Miller Tabak, said, The number is just a reminder that the road to recovery will be a very long one with still many twists and turns.
Even if the economy stops getting worse, until it starts generating at least 100,000 jobs per month, the unemployment rate is still going higher, Boockvar added.
The report also showed that the less volatile four-week moving average edged up to 617,250 from the previous week's revised average of 616,750.
Continuing claims also increased, rising to 6.738 million in the week ended June 13th from the preceding week's revised level of 6.709 million.
While continuing claims for the week ended June 6th were revised up from the previously reported 6.687 million, they still showed the first drop in continuing claims since the week ended January 3rd.
Employment data is likely to remain in focus next week, with the Labor Department scheduled to release its monthly report on the employment situation on Thursday. The report will be released a day earlier than usual due to the holiday on Friday.
In other economic news, the Commerce Department released a report showing that economic activity in the first three months of the year contracted by less than previously expected, although the report also showed a downward revision to the pace of consumer spending growth.
The report showed that gross domestic product fell at an annual rate of 5.5 percent in the first quarter compared to the 5.7 percent decrease that had been reported. The revision came as a surprise to economists, who had expected the drop in GDP to be unchanged at 5.7 percent.
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