Unemployment applications remain stuck above 400K

Associated Press

WASHINGTON

The number of Americans seeking unemployment benefits was mostly unchanged last week, evidence that the weak economy is struggling to generate jobs.

Unemployment-benefit applications ticked down 1,000 to a seasonally adjusted 428,000, the Labor Department said Thursday.

Applications have topped 400,000 for 12 straight weeks. Applications had fallen in February to 375,000, a level that signals sustainable job growth. They stayed below 400,000 for seven of nine weeks. But applications then surged to an eight-month high of 478,000 in April and have shown only modest improvement since that time.

The four-week average, a less-volatile measure, has been stuck at about 426,000 for a month.

“Another disappointing report,” Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. “This report does nothing to reassure anyone that the job environment is improving.”

Elevated unemployment-benefit applications had little impact on Wall Street. Stock futures rose Thursday as passage of a bill that will give Greece access to rescue cash looked imminent.

Many economists say temporary factors prompted companies to pull back on hiring this spring. High gas prices have cut into consumer spending. And a parts shortage stemming from the March 11 earthquake in Japan slowed U.S. manufacturing production, particularly in the auto industry.

Employers added only 54,000 net new jobs in May, much slower than the average gain of 220,000 per month in the previous three months. The unemployment rate rose to 9.1 percent.

The economy needs to generate at least 125,000 jobs per month just to keep up with population growth. And at least twice that many jobs are needed to bring down the unemployment rate.