WASHINGTON (Reuters) - New applications for unemployment benefits fell by 22,000 last week, but the number of workers remaining on jobless aid rose to its highest in more than two years, government data on Thursday showed, pointing to a weakening labor market as the economy slows.
U.S. treasury debt prices extended gains, while U.S. stock index futures briefly added losses after the data increased investors' worries about the economy and reinforced the expectation of further aggressive interest rate cuts from the Federal Reserve.
"In this environment, simply cutting back on hiring will not be enough for companies to maintain earnings as demand slows; jobs will have to be cut too," Shepherdson said.
"We are having a lot of trouble in the labor market," said Lindsey Piegza, market analyst for FTN Financial in New York. "Generally, a 350,000 to 375,000 range is a recession warning zone, and we have to be there for about a month."
In a sign that the long-term jobless continue to struggle to find work, the number of people remaining on benefit rolls after drawing an initial week of aid rose hit its highest since October 2005 in the aftermath of Hurricane Katrina.
The four-week moving average, considered a more reliable predictor of labor market trends, rose for the second straight week, climbing to 335,000 from 326,500 the prior week.
