By Christopher S. Rugaber, AP Economics Writer
WASHINGTON (AP) — The economy is looking bleaker as new applications for jobless benefits rose last week to the highest level in almost six months.
It's a sign that hiring remains weak and employers may be going back to cutting their staffs. Analysts say the increase suggests companies won't be adding enough workers in August to lower the 9.5% unemployment rate.
First-time claims for jobless benefits edged up by 2,000 to a seasonally adjusted 484,000, the Labor Department said Thursday. That's the highest total since February. Analysts had expected claims to fall.
Initial claims have now risen in three of the last four weeks and are close to their high point for the year of 490,000, reached in late January. The four-week average, which smooths volatility, soared by 14,250 to 473,500, also the highest since late February.
The report "represents a very adverse turn in the labor market, threatening income growth and consumer spending," Pierre Ellis, an economist at Decision Economics, wrote in a note to clients.
Even the lowest mortgage rates in decades are a gloomy sign for the economy. Average rates on 30-year fixed mortgages fell to 4.44%, Freddie Mac said Thursday. While that's good for people looking to refinance or buy a home, low rates haven't been enough to energize a struggling housing market.
And the drop suggests investors are losing confidence in the recovery. Mortgage rates track the yields on U.S. Treasurys. They are falling because investors are shifting more money away from stocks and into the safety of Treasurys, which forces those yields down.