By Courtney Schlisserman
Aug. 20 (Bloomberg) -- More Americans unexpectedly filed claims for jobless benefits last week, indicating companies are trying to cut costs further even as the economy stabilizes.
Applications rose to 576,000 in the week ended Aug. 15 from a revised 561,000 the week before, the Labor Department said today in Washington. The number of people collecting unemployment benefits the week earlier was little changed at 6.24 million.
Companies may keep paring staff in coming months, albeit at a slower pace, and hiring linked to the government’s recovery effort may not gain speed until 2010. While the unemployment rate dipped last month, economists project it will reach 10 percent by early next year, restraining consumer spending.
“The improvement in the labor market has stalled,” said Derek Holt, an economist at Scotia Capital Inc. in Toronto, who had forecast claims would rise to 570,000, “Consumer spending will be pushed back on its heels for a longer time than markets are expecting.”
Stock-index futures trimmed earlier gains after the report showed the recent reduction in firings wasn’t being sustained. The contract on the Standard & Poor’s 500 index was little changed at 996.8 at 8:41 a.m. in New York, after being up as much as 0.7 percent earlier.
Exceeds Forecast
Economists forecast claims would fall to 550,000 from a previously reported 558,000, according to the median of 39 projections in a Bloomberg News survey. Last week’s reading exceeded the highest forecast of economists surveyed, which ranged from 535,000 to 570,000.
Today’s data coincides with the week the government collects information for its monthly employment report. While the economy has lost 6.7 million jobs since the recession started in December 2007, the 247,000 decline in payrolls reported for July was the smallest in almost a year and lower than economists projected.
The four-week moving average of initial claims, a less volatile measure, climbed to 570,000 last week from 565,750.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 4.7 percent in the week ended Aug. 8.
Thirty-six states and territories reported an increase in new claims for the week ended Aug. 8 while 17 showed a decrease. Tennessee and North Carolina showed the biggest increases in claims, reflecting firings in transportation industries. California had the biggest decrease as payrolls at construction firms stabilized.
Payroll Outlook
Initial jobless claims reflect weekly firings and tend to rise as job growth -- measured by the monthly non-farm payrolls report -- slows.
“Concerns about the housing market, rising unemployment and softness in the overall economy continue to pressure consumers,” Frank Blake, chief executive officer of Home Depot Inc., said in a statement this week.
The largest home-improvement retailer on Aug. 18 reported second-quarter profit that fell less than analysts estimated and increased its full-year earnings forecast after reducing operating expenses.
General Motors Co., benefiting from the Obama administration’s “cash for clunkers” program, said Aug. 18 it is boosting production at some plants in Ohio and Ontario, bringing back about 1,350 union jobs.
Ford Motor Co. is boosting production by 26 percent in the second half, the Dearborn, Michigan-based automaker said Aug. 13. Chrysler Group LLC, based in Auburn Hills, Michigan, is also planning to make more light trucks, said a person familiar with the situation.
Other companies continue to make cuts. Lockheed Martin Corp., the world’s largest defense company, said Aug. 17 it plans to eliminate 800 jobs at its Space Systems unit by yearend.
To contact the reporters on this story: Courtney Schlisserman in Washington cschlisserma@bloomberg.net
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