U.S. jobless claims jump
Report suggests jobs data Friday may disappoint
U.S. jobless claims rose more than expected last week, the Labor Department reported Thursday, another troubling sign a day ahead of the release of the government's report on April employment.
The number of Americans applying for unemployment benefits rose by 43,000 to a seasonally adjusted 474,000, its highest level in eight months.
Economists had expected claims would drop to 410,000.
The report added to evidence that Friday's report may be a disappointment.
Before yesterday, the consensus among economists had been that it would show the U.S. economy created about 185,000 jobs in April, with the unemployment rate staying unchanged at 8.8 per cent.
But two reports yesterday showed lower-than-expected increases in both private sector jobs and service industries for the month.
Canada's employment for April also comes out on Friday and is expected to show employers here added 20,000 positions.
The increase in jobless claims was largely the result of unusual factors, including a high number of school systems in New York that closed for spring break and temporary auto industry layoffs caused by Japan's earthquake and tsunami, the department said.
Still, it marked the third increase in four weeks. Applications have jumped 89,000, or 23 per cent, in the past month.
The four-week average, a less volatile measure, rose for the fourth straight week to 431,250.
"The trend is clearly upward, so that's disconcerting," said Kurt Karl, chief U.S. economist for Swiss Re. "When you get three or four weeks in a row of special factors, they're no longer so special."
Applications near 375,000 are typically consistent with sustainable job growth. Weekly applications peaked during the recession at 659,000.
Separately, the Labor Department said U.S. companies squeezed more work out of their staffs in the first three months of the year. But the overall gain in productivity was much slower than in the previous three months.
A slowdown in productivity growth is bad for the economy if it persists for a long period. But it can be good in the short term when unemployment is high because it signals companies must hire more workers in order to make further gains.
Still, rising unemployment applications and other weak economic data this week have prompted some analysts to worry that higher fuel prices may be causing employers to slow their pace of hiring
With files from The Associated Press