WASHINGTON, Sept 4 - The number of Americans filing first-time claims for jobless benefits rose unexpectedly last week, a government report showed on Thursday, underscoring the labor market's continued fragility. Initial claims for state unemployment aid rose 15,000 to 413,000 in the week ending Aug. 30 from a revised 398,000 the prior week, the Labor Department said. Wall Street economists had expected claims to edge down a bit from the 394,000 initially reported for the Aug. 23 week. A four-week moving average of initial filings, which smooths week-to-week volatility to provide a clearer picture of underlying trends, also inched up, climbing 4,250 to 401,500 to break a string of four straight weeks below the 400,000 level Economists generally consider claims above 400,000 a sign of a deteriorating labor market and the recent run of lower claims had fueled hopes the economy was finally creating jobs.
"The jobless claims is an unpleasant little surprise," said Tim O'Neill, chief economist at BMO Financial Group in Toronto. "One week does not reverse a trend, but clearly we are not getting much below that magic 400,000 number and it suggests we will have to wait a bit longer for the job recovery to catch up with the rest of the economy's recovery," he said. Stock futures and the dollar moved lower after the data was released, while prices for U.S. Treasury securities rose. A spokesman for the department said last week's claims data may have been affected by the Labor Day holiday this past Monday, which shortened the time states had to compile the data, leading some to submit estimates. Nevertheless, he said there was no particular reason to believe the data was skewed.
In another sign of the tough time the unemployed face finding jobs, the number of jobless workers still on the benefit rolls after claiming an initial week of aid climbed by 24,000 to 3.66 million in the week ending Aug. 23 -- its highest level since late June. While economists have been heartened by mounting signs the economy was gathering strength, a weak labor market continues to show the recovery is not yet out of the woods. "I think the unexpected jump by initial state jobless claims warns against extrapolating too much good news from recent improvements in economic activity," said John Lonski, chief economist at Moody's Investor Service in New York. "Until employment growth returns materially, consumer spending is at risk," he said. The department will release a more comprehensive assessment of labor market conditions on Friday when it issues its employment report for August. Economists look for non-farm payrolls to inch up 12,000, which would mark the first gain in seven months.//