Jobless Claims Hit a Nine-Year High

WASHINGTON — The U.S. labor market continued to weaken into early June, with more Americans applying for first-time jobless benefits, suggesting the world’s richest economy faces a slower recovery than many analysts had foreseen.

The number of initial applications for state jobless benefits shot up to its highest level in almost nine years last week, the government said Thursday.

“I think these numbers show that the probability of a ‘V’-shaped recovery is diminishing almost daily,” said Anthony Chan, chief economist at Banc One Investment Advisers in Columbus, Ohio.

Initial claims rose to 432,000 in the Memorial Day holiday-shortened week ended June 2, from 419,000 the prior week, the Labor Department said.

Claims have not been that high since the week of Sept. 19, 1992, when they stood at 438,000 as the U.S. economy was struggling to emerge from the 1990-91 recession.

A separate government report Thursday showed inventories on U.S. wholesalers’ shelves edged up 0.3% in April as stockpiles of both long-lasting durable goods, such as automobiles, and nondurable items, such as clothing and pharmaceuticals, increased.

Wholesale inventories rose to a seasonally adjusted $302.68 billion in April, the highest level since December last year, when inventory levels reached $303.06 billion. In March, inventories inched up 0.1%.

Compared to April 2000, inventories at wholesalers were up 3%.

The initial jobless claims report heightened concerns on Wall Street that the worst may not yet be over for the struggling U.S. economy.

“This is further indication of labor market weakness, and that’s a big worry now--that the slowdown in growth is going to inflict such damage to employment incomes that consumer spending will fall,” said Pierre Ellis, senior economist at Decision Economics Inc. in New York. Wall Street economists expected a modest dip in new claims from the prior week to 417,000.

Cindy Ambler, a Labor Department spokeswoman, noted that the seasonal factors used to adjust the report “had expected a large drop in the holiday-shortened week and did not get it.”

The closely watched four-week moving average, which irons out week-to-week volatility, rose to 413,500 in the June 2 week from 402,500 the prior week, reaching its highest level since the week of Oct. 3, 1992, when it stood at 417,250.