The number of U.S. unemployment claims for last week increased more than most estimates in yet another sign that the economy has slowed during the weakest economic recovery since World War II.
New unemployment claims were about the same as last week, coming in at 374,000 in the week that ended Aug. 25, according to the U.S. Labor Department.
Meanwhile, the median forecast of 50 economists surveyed by Bloomberg News had called it at 370,000 or 4,000 less than reported. The four-week moving average of unemployment claims climbed to a six-week high on the news, according to a Bloomberg report.
Many large companies remain concerned that potential tax increases may hurt the economy and are taking a wait and see approach until after the national elections. Analysts say uncertainty about taxes and the ramifications of the Democrat’s health care overhaul have made companies wary of hiring new employees. Adding to economic turmoil, the 17- member euro area is struggling with a debt crisis and a slowdown in China has added to job losses in the U.S.
Claims have “moved sideways most of the year,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York. “Hirings are what’s lacking at this point.”
While employers added 163,000 workers in July, the biggest gain since February, according to the Labor Department jobs report issued earlier this month, the unemployment rate climbed to a five-month high of 8.3 percent. Analysts say the country needs to be consistently creating at least 260,000 jobs per month to move the unemployment rate down.
Jobs are considered the most important issue to voters as President Barack Obama campaigns for re-election. However, the unemployment rate has been over 8 percent for most of his term.
Mitt Romney, the Republican candidate, has made creating jobs the centerpiece of his campaign for the White House.