U.S. unemployment to persist: data

Statistics released Thursday suggest unemployment in the U.S. could stay high this year.

The American economy grew at an annual rate of three per cent in the period from January to March, the Commerce Department reported.

That was a revision to an initial estimate of 3.2 per cent released earlier, and showed that the economy is rebounding more slowly than earlier believed.

Economists say it takes about three per cent growth to create enough jobs just to keep up with the population increase.

The new number is based on more complete information and fell short of many economists' expectations that the revised figure would be 3.4 per cent.

James Marple, an economist with TD Economics, said the report shows the recovery continues, but "significant headwinds" remain.

For one thing, he said in a commentary, the U.S. dollar's rise of close tofive per cent since early April and Europe's debt crisis will cut into trade.

"Moreover, with fiscal stimulus and temporary housing measures unwinding in the year's second half, domestic demand growth is also likely to weaken," Marple said.

Jobless claims down

In a separate report, the Labour Department reported that initial jobless claims fell by 14,000 last weekto 460,000.

That followed a rise in the number of newly laid off workers filing claims for unemployment benefits in the previous week of 28,000, the largest increase in three months.

"We're out of recession, but the recovery is not going to bring a whole lot of smiles," said Joel Naroff, of Naroff Economic Advisors. "At this pace of economic growth, it will take a long time to bring the unemployment rate down to more reasonable levels."