April 28, 2011, 10:17 a.m. EDT
Applications jump to 429,000, the highest level in three months
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — New applications for U.S. unemployment benefits jumped last week to the highest level in three months, potentially a sign that recent improvement in hiring trends may have slowed.
The number of people who filed initial requests for jobless benefits climbed 25,000 to a seasonally adjusted 429,000 in the week ended April 23, the Labor Department reported Thursday. The last time claims were that high was in late January
Economists surveyed by MarketWatch had expected claims to decline to 395,000. Claims in the prior week were revised up slightly to 404,000.
The average of new claims over the past four weeks, meanwhile, rose by 9,250 to 408,500, the highest level since mid-February. The four-week average is considered more accurate a gauge of employment trends because it lessens week-to-week volatility in the data.
Applications for unemployment benefits have topped the key 400,000 level in each of the last three weeks, just a few months after falling to a three-year low of 375,000. Applications for jobless benefits usually fall well below 400,000 during a phase of strong economic growth.
Some economists say the rise in claims partly stems from temporary layoffs in the auto sector related to supply disruptions after the Japanese earthquake. They point to other data showing an improved U.S. labor market and suggest the increase in jobless applications could be a blip.
“We are hesitant to take too strong of a signal from the recent increase in claims data and will look to upcoming reports before suggesting that the uptick in claims is a sign that the labor market is losing momentum,” said Barclays Capital economist Michael Gapen.
The uptrend in jobless claims will shine an even greater spotlight on the next jobs report for April, which will be released May 6. The MarketWatch survey of economists projects a net increase of 200,000 jobs.
“The recent pick up in claims suggests we could see some softening in the April payrolls report,” economist Julia Coronado of BNP Paribas said in an email. BNP forecasts less hiring in April than most other firms — a net increase of 140,000 jobs.
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