US jobless claims jump

The number of US workers filing new applications for unemployment benefits unexpectedly rose last week for the first time since early April, suggesting the labour market recovery has hit a stumbling block. But a rise in manufacturing activity in the nation's Mid-Atlantic region this month offered assurance the economic recovery remained on track, even though a gauge of future strength slipped for the first time in 13 months in April.
-- Leading indicator sees first dip in 13 months
-- Mid-Atlantic region manufacturing expands
Initial claims for state unemployment benefits increased 25,000 to a seasonally adjusted 471,000, the highest level since the week ended April 10, the Labour Department said on Thursday. Markets had expected a drop to 440,000. "It raises the risk that non-farm payrolls might slow down from some of the recent strength. Given the reduced confidence people are having in the economic outlook it just adds to those fears," said David Sloan, an economist at 4CAST in New York.
The claims data fell in the survey week for the government's closely watched employment report for May, which will be released on June 4. Separately, the Philadelphia Federal Reserve Bank's index of mid-Atlantic business activity rose to 21.4 from April's 20.2, a touch below market expectations for 22.0. Any reading above zero indicates expansion in the region's manufacturing.
The Conference Board's index of US leading economic indicators slipped 0.1 percent last month, surprising analysts who had been looking for a 0.2 percent gain, a third report showed. It was the first drop since March 2009. The manufacturing-led recovery from the longest and deepest recession since the 1930s has been plagued by stubbornly high unemployment, creating a political headache for President Barack Obama and his fellow Democrats.
Last week, the four-week moving average of new claims, which is considered a better measure of underlying labour market trends, rose 3,000 to 453,500. The Philadelphia survey also had unsettling details on the labour market, with the employment component falling to 3.2 from 7.3 in April.
New applications for unemployment benefits had been grinding lower only at a slow pace, even though payrolls have now grown for four straight months. The number of people still receiving benefits after an initial week of aid fell 40,000 to 4.63 million in the week ended May 8, the Labour Department said.
The level was above market expectations for 4.60 million, but was the lowest since late March. The insured unemployment rate, which measures the percentage of the insured labour force that is jobless, was unchanged at 3.6 percent in the week ended May 8. It was the fifth straight week that the rate was unchanged at that level.