First-time jobless claims rise again

Unemployment benefit applications rose 9,000 to a seasonally adjusted 429,000, the largest increase in a month, for the week ended June 18. It was an increase from last week’s revised figure of 420,000, the Labor Department said Thursday. 

Initial claims applications have remained persistently high, staying above 400,000 for the past 11 weeks, a level higher than what economists say reflects a healthy and improving job market.

{mosads}Earlier this year, claims had dropped below that level and seemed to be forging ahead until hitting this recent skid.

The four-week moving average, a less volatile measure, was 426,250, unchanged from the previous week’s revised average.

Trends in the job market have mirrored the economy’s recent downturn, which has been hampered by high gasoline and food prices along with an underperforming housing market that is probably two years away from improvement. 

On Wednesday, Federal Reserve Chairman Ben Bernanke said that he expects unemployment to improve “painfully slowly” and that “recent labor market indicators have been weaker than anticipated.”

The Fed expects the unemployment rate will decline less quickly than earlier expectations. The Fed now expects the rate in 2011 to fall to between 8.6 and 8.9 percent, up from the 8.4 to 8.7 percent range expressed in April. The unemployment rate currently stands at 9.1 percent.

{mosads}The Fed on Wednesday left a key interest rate unchanged at near zero percent and repeated a pledge to keep rates exceptionally low for “an extended period.”

Fed officials said they think the main causes of the economy’s slowdown, such as high gas prices and supply disruptions from Japan’s earthquake and tsunami, are temporary. Once those problems ease, the economy should bounce back, they said.

Still, Bernanke acknowledged that some of the problems could remain a drag on the economy into next year, especially with continued weakness in the housing market. 

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. 

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 surged in April to 478,000, an eight-month high.

The largest increases in initial claims for the week ending June 11 were in Pennsylvania (+6,019), California (+3,884), Texas (+3,333), Georgia (+3,235) and Ohio (+2,984), while the largest decreases were in Louisiana (-899), Tennessee (-851), New Mexico (-631), Kentucky 
(-605) and Puerto Rico (-579).