Stock futures fall after surprise jump in weekly claims for unemployment benefits

Stock futures fall after jump in jobless claims

NEW YORK — Stock were set to fall Thursday after claims for unemployment benefits rose unexpectedly last week, raising more worries about the economic recovery.

Analysts say unemployment remains the biggest hurdle to a stronger recovery, and traders sold stock futures after the Labor Department’s report showed an increase in weekly claims. The surprise jump indicates the jobs market remains weak and economic growth will likely continue to slow as it has been doing in recent months.

Thursday’s weekly report on claims comes a day before the Labor Department’s key report on monthly employment. It also stands in contrast to a report Wednesday from payroll company ADP that showed private employers slightly increased hiring last month. Economic reports in recent weeks have largely painted a mixed picture about the pace of recovery.

Monthly retail sales reports showed shoppers remain skittish about spending as hiring remains scarce. Costco Wholesale Corp. and Limited Brands Inc. both reported big jumps in July sales, but that was compared with weak results a year ago. Teen retailers like The Buckle Inc. and The Wet Seal Inc. continue to struggle as consumers increase their savings rate.

The Labor Department said initial claims for unemployment benefits jumped to 479,000 last week from a revised 460,000 a week earlier. Economists polled by Thomson Reuters had forecast new claims would fall modestly to 455,000.

Unemployment claims have hovered around 450,000 throughout the year, a level that means job cuts aren’t as prevalent as during the recession, but hiring hasn’t picked up either. The weekly claims data has become one of the most important economic readings each week because of how dependent growth is on new jobs.

Thursday’s report added to the murky picture heading into the monthly employment report. The Labor Department is expected to say private employers hired 90,000 workers in July, a slight increase from the 83,000 hired in June. But because of government layoffs tied to cutting temporary census jobs, the unemployment rate is expected to rise to 9.6 percent from 9.5 percent.

Ahead of the opening bell, Dow Jones industrial average futures fell 32, or 0.3 percent, to 10,603. Standard & Poor’s 500 index futures fell 4.60, or 0.4 percent, to 1,120.00, while Nasdaq 100 index futures fell 3.25, or 0.2 percent, to 1,902.00.

The weekly and monthly reports over the next two days come after private payroll company ADP said Wednesday that private employers hired 42,000 people last month. The ADP is often used as a gauge ahead of the broader Labor Department report, which also includes government jobs with private sector employment.

Stocks rose Wednesday after the better-than-expected report from ADP and unexpected growth in the services industry. The Dow rose 44 points.

Meanwhile, bond prices rose as investors moved into the safety of Treasurys. The yield on the 10-year Treasury note, which moves opposite its price, fell to 2.93 percent from 2.96 percent late Wednesday. Its yield is often used as a benchmark for interest rates on mortgages and other consumer loans.

Overseas, Britain’s FTSE 100 rose less than 0.1 percent, Germany’s DAX index rose 0.2 percent, and France’s CAC-40 rose 0.5 percent. Japan’s Nikkei stock average rose 1.7 percent.