The number of Americans filing first-time claims for unemployment benefits rose more than forecast last week to a level that suggests the U.S. labor market is cooling.
Initial jobless claims increased by 12,000 to 346,000 in the week that ended Dec. 15, the most in a month, the Labor Department said today in Washington. The four-week moving average, a less volatile measure, climbed to 343,000, the highest since October 2005.
Homebuilders and mortgage lenders are cutting staff as the housing slump deepens and banks restrict credit, economists said. Slowing job growth raises concern consumers may limit their spending, which accounts for more than two-thirds of the economy.
“The U.S. jobs market is loosening at only a gradual pace,” Michael Englund, chief economist at Action Economics LLC in Boulder, said before the report.
A separate government report today showed the economy expanded the most since 2003 in the third quarter, before the subprime collapse rippled through financial markets to threaten growth. The Commerce Department said gross domestic product increased at a 4.9 percent annualized pace, unchanged from a previous estimate.
Economists had forecast initial jobless claims would rise to 335,000 after a 333,000 level reported the prior week, according to the median estimate of 38 economists in a Bloomberg News survey. Estimates ranged from 320,000 to 345,000.
The number of people continuing to collect state unemployment benefits increased to a one-month high of 2.646 million in the week ended Dec. 8, from 2.634 million the prior week. The unemployment rate among people eligible for benefits, which tends to track the U.S. jobless rate, was unchanged at 2 percent. These data are reported with a one-week lag.
Seventeen states and territories reported an increase in new claims, while 35 reported a decrease, the report said.
Initial jobless claims reflect weekly firings and tend to rise as job growth — measured by the monthly non-farm payrolls report — slows.
So far this year, weekly claims have averaged 320,300, up from 313,000 for all of last year.
Today’s report represents claims from the survey week for nonfarm payrolls, and will be closely watched for signals on job growth in December, economists said. Those figures will be released by the government on Jan. 4.
The economy added 94,000 jobs last month, the Labor Department reported Dec. 7. The larger-than-expected figure helped ease concern that consumer spending would collapse and push the economy into a recession, economists said.
Economic growth will slow to 1 percent this quarter as the housing slump extends into 2008 and spending softens, according to a Bloomberg survey of economists earlier this month.
Slowing demand may depress job growth. The unemployment rate, currently at 4.7 percent, may rise to 5 percent by the second half of next year, the survey showed.
Housing-related firms are suffering. H&R Block Inc., the biggest U.S. tax preparer, cut 620 jobs as it closed its money- losing mortgage business. The company’s year-long effort to sell the unit ended on Dec. 4 when a proposed sale to Cerberus Capital Management collapsed.
Some companies need more workers. American Airlines, the world’s largest carrier, this week said it plans to recall or hire as many as 250 maintenance employees, starting this month.
