July 7 (Bloomberg) — Initial jobless claims in the U.S. fell to a level that shows the labor market will take time to heal.
Jobless claims fell by 14,000 to 418,000 in the week ended July 2, Labor Department figures showed today in Washington. The median forecast of economists in a Bloomberg News survey called for a drop to 420,000. The number of people on unemployment benefit rolls and those getting extended payments also declined.
Supply-chain disruptions from Japan’s March earthquake, European default concerns and gasoline prices that neared $4 a gallon prompted some companies in recent weeks to fire workers, further weighing on the consumer spending that makes up two thirds of the economy. Economists surveyed by Bloomberg forecast the Labor Department will report tomorrow that the unemployment rate in June held unchanged at 9.1 percent.
“It’s still not low,” said Robert Brusca, president of Fact & Opinion Economics in New York. “The moving average has been stuck in this 420,000 to 430,000 range. It’s basically been doing the same thing for the last six, seven weeks. The supporting data about the job market suggest last month’s weak jobs report was not a one-off, that job growth is actually weaker than previously thought.”
Stock-index futures held gains and Treasury securities fell after the report. Futures on the Standard & Poor’s 500 Index increased 0.8 percent to 1,346.00 at 8:47 a.m. in New York. The yield on the 10-year Treasury note, which moves inversely to prices, rose to 3.16 percent from 3.11 percent late yesterday.