The Labor Department reported this morning that initial jobless claims last week rose by 4,000 to 371,000. Economists had been expecting a decrease in the number of Americans making their first filing for unemployment benefits. The less-volatile 4-week moving average jumped to 365,750.
Over five million Americans are now collecting unemployment benefits. The sluggishness of the job market acts as a brake on economic growth. Consumer spending, which accounts for around two-thirds of economic activity, is strongly correlated with job and wage growth.
For the past two years, the economy has added just around 150,000 new jobs each month. That is barely enough to keep up with population growth. The economy needs to double that monthly average to accelerate economic growth.