NEW YORK — A private forecast of economic activity rose for the sixth straight month in September, a sign the economy may keep growing early next year despite rising unemployment.
The number of new claims for jobless benefits jumped more than expected last week. Claims had fallen in five out of the previous six weeks, and most economists expect that trend to continue but at a slow pace, with employers still reluctant to hire.
The Conference Board said Thursday that its index of leading economic indicators rose 1 percent last month after a 0.4 percent gain in August, beating economists’ expectations.
The group said the indicators’ 5.7 percent growth rate in the six months through September was the strongest since 1983, but joblessness is weighing on the rebound. Dips in manufacturing hours worked and building permits, a gauge of future construction, were the only two measures out of 10 that weighed down the index. It is meant to project economic activity in the next three to six months.
The six-month rate is consistent with annual economic growth of about 8 percent, said Paul Dales, U.S. economist at Capital Economics. It’s unlikely the rebound will be that strong, however, as the index may be “distorted” by the Federal Reserve’s rock-bottom interest rates and market liquidity measures, he said.
The government will report on third-quarter economic growth next week. Many economists think gross domestic product — the value of all goods and services produced in the United States— grew about 3 percent after falling for a record four straight quarters. But many wonder if that pace can continue in the current quarter and next year as unemployment rises and consumers remain hesitant to spend.
Lack of job growth is a major problem. The Labor Department said the number of newly laid-off workers filing claims for jobless benefits rose to a seasonally adjusted 531,000 last week, from an upwardly revised 520,000 the previous week. Wall Street economists had expected only a slight increase, according to Thomson Reuters.
Economists consider jobless claims a gauge of layoffs and a sign of companies’ willingness to hire.
The four-week average of claims, which smoothes out fluctuations, fell to its lowest level since mid-January. But claims remain well above the 325,000 that economists say is consistent with a healthy economy.
The report is “slightly disappointing,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a note to clients. “But it does not change the core story, which is that ... a clear downward trend in claims has emerged” over the past two months.
A rebound in the housing sector and manufacturing is helping drive economic activity higher, aided by government stimulus programs and demand from overseas.
Still, manufacturing won’t add jobs in the U.S. Hiring by the nation’s restaurants, shops, banks and other service providers is needed for that to happen. Consumer spending powers those businesses, and as long as unemployment is rising and credit tight, shoppers likely will remain wary of big spending.
Profits and sales were down for another quarter at UPS. The world’s largest package delivery company said this week that customers are shipping fewer and lighter packages. In some cases, they’re choosing slower and cheaper shipping options.
The government also said Thursday that people continuing to claim unemployment benefits dropped to 5.9 million for the week ended Oct. 10, the fifth straight weekly drop.
Recipients filing for aid for the government’s extended benefit programs dropped about 50,000, to 8.8 million in the week ended Oct. 3. The government is funding up to 53 extra weeks of benefits on top of the 26 weeks states usually provide. But economists say that decline is likely due to jobless benefits running out, rather than people finding jobs.