According to the Department of Labor, jobless claims climbed by 8,000 to 365,000 in the week ending July 28, a number that was less than the projected forecast but still troubling. Starting next week, the data should be clear of any influence from the annual auto plant retooling closures that make it difficult to adjust the data for seasonal variations. Apart from the statistical noise, the job market may take time to heal as a global slowdown and looming U.S. fiscal policy changes in the world's biggest economy keep employers reluctant to add workers.
Unemployment above eight percent is among the reasons Federal Reserve policy makers recently said they would take new steps as needed to boost the expansion. "It is still a difficult job market," said Ryan Sweet, a senior economist at Moody's Analytics Inc. in West Chester, Pennsylvania. "Companies are not panicking by cutting workers. They are going to wait out the uncertainty related to Europe and the U.S. fiscal cliff."