The number of U.S. workers filing new claims for jobless benefits unexpectedly rose last week, a government report showed on Thursday, fanning worries of an anemic recovery from the worst recession in 70 years.
Initial claims for state unemployment insurance benefits rose 15,000 to a seasonally adjusted 576,000 in the week ended August 15 from 561,000 the prior week, the Labor Department said. Analysts polled by Reuters had forecast new claims slipping to 550,000 last week from a previously reported 558,000.
I think that we're hoping for the numbers to stay below 600,000, and not until we get below 500,000 can we be more certain that there is an economic recovery, said Linda Duessel, market strategist at Federated Investors in Pittsburgh.
Futures for the Dow Jones industrial average and the Nasdaq turned negative after weak jobless data, while U.S. government debt prices erased losses.
While economic data continue to point to a pending upturn from the recession that started in December 2007, doubts over the sustainability of the recovery are causing companies to be cautious.
Though the pace of layoffs has slowed markedly from early this year, unemployment remains high and continues to inflict big dents in household incomes. There are fears that consumer spending will be too tepid to drive the recovery.
The number of people collecting long-term unemployment benefits edged up 2,000 to 6.24 million in the week ended August 8, the latest week for which the data is available. However, the four-week moving average declined 2,500 to 6.27 million.
The insured unemployment rate, which measures the percentage of the insured labor force who are jobless, was unchanged at 4.7 percent.
The four-week moving average for new claims climbed 4,250 to 570,000 last week. The four-week moving average is considered a better gauge of underlying trends as it irons out week-to-week volatility.