NEW YORK (CNNfn) - New jobless claims soared in the United States last week, the government said Thursday, topping analysts' expectations and pointing to continued weakness in the nation's job market.|
New claims for state unemployment benefits rose to 445,000 in the week ended July 7 -- their highest level since July 25, 1992 -- from a revised 403,000 the prior week, the Labor Department reported. Analysts surveyed by Briefing.com had forecast new claims of only 390,000.
"These data indicate that the deterioration in the labor market has not been halted," said Steven Wood, economist with FinancialOxygen. "Therefore, the slowing in the broad economy has likely not been halted either."
Last week's data are even more disturbing considering the week was shortened by the July 4 holiday. Still, economists typically are less concerned over rises in jobless claims during this time of year because of the expected auto plant shutdowns, which typically produce big jumps in claims.
"As we get into the month of July, it is always a difficult and very volatile period for initial claims," said Ken Mayland, an economist with ClearView Economics in Pepper Pike, Ohio.
The four-week moving average of new claims, considered a better gauge of jobless trends, rose to 410,750 from the previous week's revised 408,250. Economists watch the four-week moving average more closely since it smoothes fluctuations in the weekly data.
Continued claims -- those by workers who already have claimed at least a week of benefits -- rose to 3.046 million in the week ended June 30. Those data, the latest available, follow a revised reading of 3.01 million the prior week.
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Consumer spending, which makes up two-thirds of the U.S. economy, has remained surprisingly strong during an economic slowdown this year.
The Federal Reserve, the U.S. central bank, has cut its target for short-term interest rates six times this year in an effort to make money available to consumers and keep them spending despite hundreds of thousands of layoffs.
Continuing weakness in the labor market could encourage the Fed to cut rates again when it next meets on Aug. 21 to set monetary policy.
"The [Fed] will need to cut interest rates further," FinancialOxygen's Wood said.