New unemployment claims increased last week for the fourth consecutive week heightening concerns the recovery in the labor market is softening. During May, private employers also added just 133,000 jobs, which was fewer than anticipated. Growth in the U.S. was also slower than initially thought during the first quarter as businesses inventories were restocked at just a moderate pace and spending by the government was down sharply.
Economists had predicted an increase in jobs of 150,000 for May. Analysts say that businesses are not confident about hiring until they see evidence of an overall pickup in overall consumer spending, while the euro zone struggles against a possible recession. On Friday, the Labor Department will release its report on jobs. New unemployment claims reached a five-week high to 383,000 during last week.
Unemployment will not fall at a quick rate if more jobs are not added to the economy, said one analyst. The latest numbers he said are consistent with a modestly growing economy.
The Gross Domestic Product in the U.S. grew by only 1.9% on an adjusted annual rate in the first quarter of 2012, down from an estimate of 2.2%. Industries that produce goods including builders and manufacturers increased jobs by 1,000. Construction declined by almost 1,000 jobs and factories lost another 2,000.
In companies that have over 499 employees, 9,000 new jobs were made available, while medium sized companies of between 50 and 499 employees added over 57,000 jobs and small businesses increased their staff by 67,000.