The number of Americans filing claims for jobless benefits fell more than economists predicted, a sign some employers have stopped paring staff as the recession eases.
Applications dropped by 38,000 to 550,000 in the week ended Aug. 1, figures from the Labor Department showed today in Washington, marking the fifth consecutive week of fewer than 600,000 claims. The total number of people collecting unemployment insurance rose.
The pace of job cuts has slowed even as unemployment is projected to exceed 10 percent by early next year. Economists surveyed by Bloomberg News say a report tomorrow will show the jobless rate jumped to the highest in 26 years in July. Stagnating wages and falling home values also mean consumer spending, 70 percent of the economy, will be slow to recover.
“These numbers signal the worst is behind us, but we are not out of the woods yet,” said David Semmens, an economist at Standard Chartered Bank in New York. “We are not going to see strong consumer spending with numbers that look like this.”
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