Jobless Claims Stuck in a Rut

New applications for unemployment benefits remained unchanged last week, the latest Labor Department data showed, suggesting little pickup in hiring in the United States.

Initial jobless claims remained at a seasonally adjusted 374,000 in the week ended Aug. 25. The claims from two weeks ago were revised up to 374,000 from an original reading of 372,000. Economists on average had expected claims would fall to 370,000.

The Labor Department also indicated that continuing claims, which reflect the numbers of people already receiving benefits, fell by 5,000 to a seasonally adjusted 3.32 million in the week ended Aug. 18.

Applications for unemployment benefits have lingered around 370,000 for the past five weeks, showing almost no improvement since falling to a four-year low in February. The slowdown in the U.S. economy clearly has prompted businesses to scale back hiring plans. The potential for sharp spending cuts and tax increases in the U.S. early next year, as well as the ongoing financial crisis in Europe, have added to uncertainty.

However, the Commerce Department said separately that consumer spending rose in July by the largest amount in five months, and that personal income also rose.

Filed under: 24/7 Wall St. Wire, Economy