The number of Americans receiving unemployment benefits rose to a 2 1/2-year high, a sign the slowing economy hinders hiring.
The number of people continuing to receive jobless benefits rose to 2.835 million in the week ended March 1, the highest since September 2005, from 2.828 million the prior week, the Labor Department said today in Washington. First-time claims for benefits were unchanged at 353,000 last week.
The faltering job market and the deepening slump in housing threaten to hurt consumer spending. Traders are betting Federal Reserve policy makers will likely cut interest rates again next week after the February payrolls report signaled the economy is heading to, or may already be in, a recession.
"Labor markets are weakening,'' Sal Guatieri, senior economist at BMO Capital Markets in Toronto, said before the report. "Sustained weakness in employment could deal a knock- out blow to wobbly consumers.''
Another government report showed retail sales in the U.S. unexpectedly fell in February. Purchases dropped 0.6 percent last month, led by declines at auto dealers and restaurants, after a 0.4 percent gain in January, the Commerce Department said. Purchases excluding autos declined 0.2 percent.
Weekly initial claims were forecast to rise to 357,000 from 351,000 initially reported for the prior week. Estimates ranged from 345,000 to 370,000.
The latest week of initial claims may have been affected by a strike by General Motors Corp.'s largest axle supplier, American Axle & Manufacturing Holdings Inc., a Labor Department official said. Still, the department hasn't yet received specific figures from strike-affected states, including Ohio, Indiana and Michigan.
The walkout has led GM to shut or cut back production at 29 plants. The shutdowns have affected almost 42,000 hourly and salaried workers, according to the company's Web site. American Axle and the United Auto Workers stopped talks on a new contract March 10, and were expected to resume them today.
The unemployment rate among people eligible for benefits, which tends to track the U.S. jobless rate, stayed at 2.1 percent. These data are reported with a one-week lag.
Thirty-two states and territories reported an increase in new claims, while 20 reported a decrease, today's Labor report said.
Initial jobless claims reflect weekly firings and tend to rise as job growth -- measured by the monthly non-farm payrolls report -- slows.
So far this year, weekly claims have averaged 345,500, compared with 322,000 for all of last year.
U.S. employers unexpectedly cut jobs in February for the second consecutive month, the Labor Department's employment report showed last week.
Payrolls fell by 63,000, the most in five years, after a revised decline of 22,000 in January. The jobless rate dropped to 4.8 percent, reflecting a shrinking labor force as some people gave up looking for work.
Among companies announcing workforce cuttings this week, Raytheon Co., the world's largest missile maker, said it plans to cut 142 jobs in Fort Hood, Texas, because of the expiration of an Army training contract.
The discovery of the submarine has unveiled a few "inconsistencies." For example, how can one explain the fact that the sub was found where it needed to be searched for from the start?