Demand for new unemployment benefits rose in the US to a five-week high last week, in the latest sign that the US job market remains very weak.
The Labor Department said that first-time unemployment insurance claims rose to 439,000 last week from an upwardly revised 434,000 the previous week. Any figure above 400,000 is viewed by many economists as a sign of a shrinking job market. Claims have been above that level for most of this year.
The figures follow the department's monthly employment survey which found that the jobless rate jumped to a new nine-year high of 6.4 per cent last month from 6.1 per cent in May.
Economists are generally hopeful that previous tax cuts, interest rate cuts, oil price drops, the passage of war jitters and the stock market's rebound will set the stage for stronger economic growth.
But to date, US economic growth remains too slow and uncertain to match the growth of the labour force and productivity and coax US businesses into expanding their operations.
The National Association of Business Economics, the largest group of corporate forecasters in the US, said earlier this week it expected growth to remain sluggish and for unemployment to rise for the rest of this year.
Stock prices, however, have jumped sharply over the past four months as investors have placed big bets on an eventual, sharp turnaround.
There were other arguably positive and preliminary economic signs in a separate department report on import prices.
The Labor Department said import prices jumped 0.8 per cent last month after a 0.8 per cent drop in May. Increases in non-fuel prices were the largest on record. Prices on imports of business equipment were the biggest in nearly four years.
The prices report suggested the US economy might be picking up steam and, with the help of the dollar's slide over the past year, warding off risks of deflation.
Email This Page!