US unemployment insurance claims rise to half-year high

The number of workers in the United States filing new claims for unemployment insurance unexpectedly rose to its highest level in close to six months, thus indicating a weak job market.

The new claims for jobless benefits rose by 2,000 to a colossal 484,000 in the week that ended on August 7, a second straight week of increase, data from the labour department showed on Thursday.

"This is not a good number," said John Brady, an analyst at MF Global in Chicago. "Claims are going the wrong way. That has the market concerned."

The data came two days after the Federal Reserve downgraded its assessment of the economy's health and said it would take steps to ensure its support to the fragile economic recovery.

The US stock index future added to losses, while the US treasury debt prices pared losses following release of the data.

The jobless claims data is the latest in a series of releases which indicates that the pace of the economic recovery is slowing.

Economists have been ratcheting down estimates for the second-quarter economic growth after the data on trade and inventories for June suggested that it was not as strong as expected.

The government estimated last month that the economy advanced at an annualised pace of 2.4% in the April-June quarter, far slower than the 3.7% pace of the first quarter. Now some economists believe that the economy may have grown at less than half that rate.

The labour department said separately that increased oil prices pushed prices for imported goods higher in July for the first time in three months.

Import prices rose by 0.2% in July after dropping by 1.3% in June from a revised 0.8% in May. That left the three-month cumulative total down 2%, the largest decline since the three months that ended in February 2009.

Economists polled by Reuters had expected import prices to rise to 0.4% in July.

The four-week moving average of unemployment claims, which economists prefer because it smoothes out weekly fluctuations, rose from 14,250 to 473,500, also the highest level since the week that ended in February 2009.

Economists polled by Reuters had expected claims in the latest week to fall to 465,000 from the previously reported 479,000.

The number of people still collecting unemployment benefits after an initial week of aid in the week that ended on July 31 fell by 118,000 to 4.45 million, the lowest level since late June.

Economists had expected 4.53 million claims.

The four-week moving average of continuing claims dropped by 64,500 to 4.52 million, the lowest level since December 2008.

Prices for exported goods unexpectedly fell by 0.2% in July after falling by a revised 0.7% in June. The Reuters poll showed economists expecting a 0.1% increase in July.

Oil import prices rose 2% last month after falling for two months while prices excluding oil dropped 0.2%.