Initial Claims Rise Due to Temporary Layoffs

WASHINGTON – The number of Americans filing new claims for jobless aid rose 7,000 last week, and a significant portion of the rise was due to temporary layoffs in the auto and school sectors, the government said on Thursday.

First-time claims for state unemployment insurance benefits (search) rose to 319,000 in the week ended July 2 from a revised 312,000 in the prior week, the Labor Department (search) said.

Wall Street had forecast a rise to 319,000 from the original reading of 310,000 in the week ended June 25.

A Labor Department analyst attributed a "significant portion" of the increase in claims to layoffs in the automobile industry, which has begun its annual shutdown for model changes, and to layoffs of temporary employees of the school system such as bus drivers and cafeteria workers. Many U.S. schools close for summer holidays.

The closely watched four-week moving average of claims fell for the third straight week, slipping to 320,500 from 324,000 the previous week. That was the lowest level since March 5.

The number of people who remained on the benefit rolls after drawing an initial week of aid fell 16,000 to 2.58 million in the week ended June 25, the latest week for which those data are available.

A more comprehensive snapshot of the economy is likely to emerge on Friday with the Labor Department's release of the June employment report, which is expected to show a 188,500 increase in payroll jobs after a rise of just 78,000 in May. The unemployment rate (search) is expected to remain unchanged at 5.1 percent.