The number of U.S. workers filing new claims for jobless benefits unexpectedly rose last week to the highest level in close to six months, the latest evidence the economy's recovery is faltering.
Thursday's data came two days after the Federal Reserve spooked investors by downgrading its assessment of the economy. The increase in jobless claims added to worries in the stock market, which has failed to make any gains this year.
The number of new claims for state unemployment insurance rose by 2,000 to 484,000 in the week ended August 7, the second straight increase, the Labor Department said. Economists had expected claims to edge down to 469,000.
"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."
U.S. stocks closed down for a third straight day, pressured by the data and a disappointing revenue forecast from tech bellwether Cisco Systems Inc.
"We are seeing a large number of mixed signals in both the market and from our customers' expectations," Cisco CEO John Chambers told analysts on Wednesday. "We think the words 'unusual uncertainty' are an accurate description of what is occurring," he added, echoing Fed Chairman Ben Bernanke's recent comments on the economy.
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