US jobless claims show unexpected rise

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The number of Americans claiming jobless benefits has risen for the second week running, as the US economy continues to wrestle with persistent unemployment.

First-time jobless claims rose by 7,000 to 480,000, according to labour department figures on Thursday, defying expectations of Wall Street economists that they would sink. The less volatile four-week average of new claims, however, fell by 5,250 to 467,500, maintaining a healthier trajectory.

Continuing jobless claims were also up, climbing by 5,000 to 5.19m.

“Jobless claims join many other indicators in suggesting that the official government payroll data have been overstating the degree of improvement in the labour market,” said Joshua Shapiro, chief US economist at MFR.

Last month, the US unemployment rate fell back to 10 per cent when a much smaller than expected 11,000 jobs were shed. Analysts argue that jobless claims need to drop to the 400,000 mark before the economy can begin to create jobs.

States with the highest levels of jobless claims included California, Georgia, North Carolina and Pennsylvania. Job cuts in the construction, manufacturing, chemical and mining sectors were widespread.

On Wednesday, the Federal Reserve said in its latest policy statement that “the deterioration in the labour market is abating”. However, the high rate of joblessness continues to weigh on the economy and lawmakers have pushed to extend unemployment benefits and offer incentives to employers in an effort to stimulate recruitment.

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