Still feeling the effects of a disappointing jobs report in May, as the number of American unemployment claims rose last week for the fifth time in six weeks.
According to the Department of Labor, initial claims for state unemployment benefits increased 6,000 last week to a seasonally adjusted 386,000. Disappointing hiring numbers remain in line with a recent three-month trend, according to the Associated Press. After a three month period in which an average of 252,000 jobs were added each month, the last three months have added an average of 96,000 jobs per month.
Analysts point to a number of factors including the European debt crisis and economic slowdowns in emerging markets such as China and India, but no one can truly say why hiring is down.
Peter Cardillo, an economist at Rockwell Global Capital in New York, told Reuters that regardless of the reason, it's clear that businesses are showing a reluctance to bring on new workers.
"The data shows that there is skepticism on the part of companies that are hiring," Cardillo said.
As reported yesterday in this blog, the recently grim economic reports have led to a dropoff in consumer spending, which in turn has led to deflated retail prices. A report from Reuters states that this may be the only way the government can save face, as out of work citizens may need to rely on lowered prices as a means to survive difficult times.
Analysts have shown concern over recent numbers, but it is important to remember that trends can turn at any time and grim reports do not always lead to poor market performance. Investors and financial advisors considering related ETFs should examine the fundamentals of underlying stocks before investing.
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