New Weekly Jobless Claims Rise 25,000 to 471,000

WASHINGTON -- The number of people filing new claims for unemployment benefits unexpectedly rose last week by the largest amount in three months. The surge is evidence of how volatile the job market remains, even as the economy grows.

Applications for unemployment benefits rose to 471,000 last week, up by 25,000 from the previous week, the Labor Department said Thursday. It was the first increase in five weeks and the biggest jump since a gain of 40,000 in February.

The forecast had been for claims to fall by around 4,000 from the previous week.

"Although no one expects this volatile series to go in one direction every single week, this is clearly a disappointment," said Jennifer Lee, senior economist at BMO Capital Markets.

The total was the highest since new claims stood at 480,000 on April 10. It also pushed the average for the last four weeks to 453,500.

Employers are hiring again, but not at levels needed to make a dent in the unemployment rate, which increased in April to 9.9 percent. An improving economy has lured those who had given up looking for work back into the labor market. The jump in the unemployment rate came even though payrolls rose last month by 290,000 jobs, the biggest gain in four years.

Analysts could trim their forecasts for job growth in May based on the sudden rise in new claims. The increase occurred in the week that the government conducts its survey for the monthly unemployment report.

The number of people receiving jobless benefits fell by 40,000 to 4.63 million for the week ending May 8.

However, that figure does not include unemployed workers who have exhausted their regular 26 weeks of benefits. An additional 5.3 million workers are receiving extended benefits paid for by the federal government for the week ending May 1.

The extended benefits have added as many as 73 weeks of unemployment on top of the 26 weeks customarily provided by the states. But jobs have been scarce for so long that many of those out of work will soon run out of the extended benefits.

For the week ending May 8, 35 states and territories saw increases in applications for new jobless benefits and 18 saw declines.

The largest increase came in California, up 8,351 because of layoffs in service industries and manufacturing. It was followed by Michigan, up by 3,175 because of layoffs in the auto industry.

The states with the largest declines in jobless application were: New York, down by 3,144, because of fewer layoffs in transportation, services and manufacturing; and Kentucky, with a drop of 2,193.