By Timothy R. Homan and Bob Willis Feb. 4 (Bloomberg) -- More Americans unexpectedly filed first-time claims for unemployment insurance last week, indicating companies lack confidence the economic recovery will be sustained. Initial jobless applications increased to 480,000 in the week ended Jan. 30, the most in seven weeks, from 472,000 the prior week, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance was little changed and those receiving extended benefits increased. An unemployment rate that’s projected to average 10 percent this year will likely weigh on consumer spending, preventing the biggest part of the economy from accelerating. Without additional gains in sales, companies will be forced to keep cutting costs, limiting staff in order to boost profits. “Businesses are simply postponing their hiring for as long as possible,” Richard DeKaser, chief economist at Woodley Park Research in Washington, said before the report. “The willingness to hire is not there.” Initial jobless claims were forecast to decline to 455,000 from a previously reported 470,000 the week before, according to the median estimate of 46 economists surveyed by Bloomberg News. Estimates ranged from 420,000 to 480,000. Worker productivity kept surging in the fourth quarter as companies squeezed more out of remaining staff to boost earnings, another report from the Labor Department also showed. Productivity, Costs A measure of employee output per hour rose at a 6.2 percent annual rate, capping a 2.9 percent gain for all of 2009 that was the biggest one-year increase since 2003. Labor costs dropped at a 4.4 percent pace last quarter and fell 0.9 percent for all of 2009, the biggest drop in seven years. The four-week moving average of claims increased to 468,750 from 457,000 the prior week. Continuing claims were little changed at 4.6 million in the week ended Jan. 23. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs. Today’s report showed the number of people who’ve used up their traditional benefits and are now collecting extended payments increased by about 242,000 to 5.86 million in the week ended Jan. 16. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.5 percent in the week ended Jan. 23, today’s report showed. Payroll Forecast The figures raise concern the improvement in the labor market has stalled heading into tomorrow’s monthly employment report. The U.S. may have created 15,000 jobs in January, according to the median forecast of economists surveyed. It would mark the second payroll increase in the past three months. The unemployment rate probably held at 10 percent in January for a third straight month, close to the 26-year high of 10.1 percent reached in October, the economists forecast. A private report yesterday showed companies in the U.S. cut an estimated 22,000 jobs in January. The drop was the smallest in two years and followed a revised 61,000 decrease the prior month, according to data from ADP Employer Services. Macy’s Inc., the second-biggest U.S. department-store chain, is eliminating 1,500 store-level positions effective March 6, two people familiar with the decision said last week. More Dismissals The Cincinnati-based retailer is firing department managers and merchandising team managers, said the people, who declined to be identified because the cuts haven’t been made public. Some stores are losing operations managers, and the remainder will be shared across multiple stores, the people said. In addition, full-time stock positions were cut, they said. Other companies are adding to payrolls. General Electric Co. is hiring workers in energy, health care and rail transportation in part because global economic-stimulus policies have created demand, two executives said last week. GE is bidding to supply new passenger locomotives for Amtrak, and in November announced a joint venture in China that would make high-speed rail locomotives that may add 200 U.S. jobs. “We will create jobs in the United States that could not have been created any other way,” John Rice, chief executive officer of GE Technology Infrastructure, said in an interview with Bloomberg Television from Davos, Switzerland, last week. The loss of 7.2 million jobs since the recession began has been the worst in the post-World War II era. To contact the reporters on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net; Bob Willis at bwillis@bloomberg.net

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