Index, benefits data
 underscore weakness

Associated Press

A gauge of future economic activity and a report on unemployment benefits signaled Thursday that the recovery likely will remain weak in the coming months.

The Conference Board’s index of leading economic indicators rose less in October than analysts had expected. The index forecasts activity by measuring consumer expectations, building permits and other data.

And the number of newly laid-off workers seeking unemployment benefits, unchanged last week, remains above the level that would indicate the economy is adding jobs.

Together the reports suggested that the lack of job creation is dampening consumer expectations and prospects for an economic rebound. Uneasy consumers likely will curtail their spending, which powers about 70 percent of the U.S. economy.

New jobless claims have fallen about 22 percent since spring. But companies’ reluctance to hire is weighing down the economy’s fledgling recovery.

The Labor Department’s report on jobless benefits said first-time claims amounted to a seasonally adjusted 505,000 last week. That was the same as the previous week’s revised figure, and it matched analysts’ expectations. A year ago, there were 533,000 initial claims.

Some economists said the report was at least an encouraging sign that job losses in November will decline. Employers cut 190,000 jobs in October, down from 219,000 in September.

Economists at Deutsche Bank say net job losses will fall to 125,000 in November. But the economy needs to add about 125,000 jobs a month to keep the unemployment rate from rising.

While the steady decline in claims is evidence that firings are decreasing, most economists say weekly claims have to fall to about 425,000 for several weeks to signal that the economy is actually adding jobs. Some economists put the number at 475,000.

Separately, the Conference Board said its index of leading economic indicators rose 0.3 percent last month, indicating a slow, bumpy recovery next year. A gauge of consumer expectations, which are dropping as unemployment continues to rise, weighed down the index.