US jobless claims surge

US jobless claims surge

The figure was well above analysts' consensus forecast of 418,000 new claims.
The rolling four-week average of jobless claims, seen as a more reliable indicator of underlying trends in the labor market, climbed 4,000 to 419,500.

The US economy created no net new jobs in August and official unemployment remained at 9.1 percent.

The August report was the first since February 1945 to show no net change in employment.

Besides the disappointing numbers for August, the Labor Department also reduced its estimates for June and July by a total of 58,000, meaning that only 105,000 new jobs were created in the two-month period.

Economists say the US needs to create around 150,000 new positions every month just to keep pace with population growth, while it will take a substantially higher rate of employment expansion to recoup the 8.4 million jobs destroyed in the recession.

Past economic recoveries have seen an average of 250,000 new jobs created every month and weekly jobless claims well under 400,000.

For the week ending Sep 3, the number of people receiving state unemployment benefits dropped by 12,000 to 3.73 million.

Emergency federal programs to aid people who have exhausted their state benefits were serving 3.41 million during the week that ended Aug 27.

The ranks of people who have been out of work for more than six months held steady in August at 6 million, representing 42.9 percent of the jobless.

Workforce participation - the proportion of the population working or seeking work - climbed slightly last month to 64 percent after reaching a 27-year low in July.