The number of Americans filing for jobless aid rose to an eight-month high last week and productivity growth slowed in the first quarter, clouding the outlook for an economy that is struggling to gain speed.
While the surprise jump in initial claims for unemployment benefits was blamed on factors ranging from spring break layoffs to the introduction of an emergency benefits program, economists said it corroborated reports this week indicating a loss of momentum in job creation.
New claims for state jobless benefits rose 43,000 to 474,000, the highest since mid-August, the Labor Department said on Thursday. Economists had expected claims to fall.
One factor that likely helped push claims up and that could prove lingering were auto layoffs brought about by supply disruptions from Japan’s earthquake and tsunami.
A second report showed nonfarm productivity increased at a 1.6 percent annual rate in the first three months of the year, braking from a 2.9 percent pace in the fourth quarter.
“We do not think that the entire rise in claims over the last month can be explained by special factors alone,” said Harm Bandholz, chief U.S. economist at UniCredit Research in New York. “It seems instead as if the improvement in the labor market slowed a bit.”
You know, the post-bin Laden afterglow is only going to last a little while. Pretty soon, the attention of Americans will re-focus on the economy. And if the situation does not dramatically improve by the time that it does, then President Obama may not be the shoo-in for re-election I and others currently believe that he is.