Unemployment applications had fallen in February to 375,000, a level that signals sustainable job growth. They stayed below 400,000 for seven of nine weeks. But applications surged in April to 478,000 — an eight-month high — and they have been stuck above 400,000 since then.
Neil Dutta, an economist at Bank of America Merrill Lynch, said hiring will likely rebound to a pace of about 150,000 new jobs per month. But that's barely enough to reduce the unemployment rate.
Recent data suggests that employers have lost some confidence in the economic recovery, Dutta said. He pointed to gas prices, the Japan crises that have led to a parts shortage and the inability of Congress to agree on a plan to raise the $14.3 trillion debt ceiling as the main reasons.
Food prices are also straining household budgets. The latest forecast for the U.S. corn crop suggests that will continue through next year. The United States will have a surplus of just 695 million bushels of corn in 2012, far less than the 900 million estimated last month.
Rain delayed planting schedules and will likely diminish crops by harvest time in September, the government said. More expensive grain could ultimately make everything from beef to cereal to soft drinks more expensive at the supermarket. For all of 2011, the USDA predicts food prices will rise 3 percent to 4 percent.
There were some positive signs in the latest reports.
American companies sold more computers, heavy machinery and telecommunications equipment in foreign markets in April. That pushed exports to a record high for the second straight month and narrowed the trade deficit for the first time since December. A weaker dollar has made U.S. goods and services cheaper overseas.
And sales by wholesale companies increased in April for the ninth time in 10 months.
AP Writers Martin Crutsinger and Christopher Leonard contributed to this report. Leonard reported from St. Louis.
Copyright 2011 The Associated Press.