The U.S. government witnessed a beyond expected increase in number of unemployment benefits claims.
For the first time in the last three weeks, the U.S. government witnessed an increase in the number of unemployment benefits claims, which went over 20,000.
According to a report by The Labor Department, Thursday, claims for unemployment benefits rose to 362,000 last week compared to the 342,000 claims made the week before that.
Companies continue to maintain their staffing levels even with growing concerns of rising gasoline prices and a January tax increase dampening consumer spending. Looming cuts in government spending also threaten to slow growth, a sign that hiring may be limited in coming months.
"It's a stable level of claims," said Yelena Shulyatyeva, an economist at BNP Paribas in New York, which predicted claims would rise to 365,000. "The main issue is the pace of hiring is not picking up. Businesses feel very uncertain about the outlook."
Earlier this month, despite positive news from the Labor Department's jobs report suggesting growth acceleration at the end of last year and beginning of this year, unemployment rates in the U.S went up by 7.9 percent.
The fear of recession will slowly subside as the report suggests that 157,000 jobs were added in January with improvement in other economical data as well.
"A solid gain in US employment provides welcome reassurance that the US economy is healthier than the surprise fall in fourth quarter GDP indicated and is not at risk of a renewed recession," said Chris Williamson, chief economist at research firm Markit. "However, policymakers will no doubt remain unimpressed at the pace of the job market recovery, suggesting there is no end in sight for Fed stimulus."
House Speaker John Boehner said the latest numbers show "this is the wrong time for President Obama to scrap his jobs council."
"Month after month we see the same thing: high unemployment and even more debt. More than 12 million Americans are still unemployed, and it's been that way for far too long," he said in a statement.
