New claims for jobless benefits in the U.S. increased in the latest week as the labor market recovery struggles to maintain momentum, while consumer sentiment improved slightly on easing gas prices, according to Bloomberg. On Thursday, the Labor Department reported that initial claims for unemployment benefits in U.S. states increased by 10,000 in the week ending May 21 to 424,000, defying forecasts for a decrease of the same size. The four-week moving average of new claims shed about 2,000 claims to 438,500 on a strong decrease in new claims during the previous week.
Russell Price of Ameriprise Financial linked to the increase in new claims to “upward pressure from state and local government job cuts,” although the Federal Reserve said at its latest meeting that the labor market has “continued to improve, albeit gradually.” A separate report from Bloomberg consumer comfort index increased to -48.4 in the week ending May 22 from the nine-month low of 49.4 recorded the prior week. The gain was the first in over a month, although the reading stands below the -40 mark that is typically associated with recessions and their after effects. The sub-indices of personal finances and the buying climate both increase, while the gauge of the economy was nearly unchanged.
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