Weekly Jobless Claims Rise to Highest Level Since February

By Elvina Nawaguna

WASHINGTON -- New applications for U.S. unemployment insurance benefits rose last week to their highest level since February, suggesting some slowdown in the labor market recovery.

Initial claims for state unemployment benefits rose 15,000 to a seasonally adjusted 297,000 for the week that ended July 4, the Labor Department said Thursday.

Even with the rise in claims, the latest report marks the 18th consecutive week of new filings below 300,000, which is considered consistent with a firming labor market.

%VIRTUAL-WSSCourseInline-876%The previous week's claims were revised to 282,000, showing that 1,000 more people filed than initially reported.

Economists polled by Reuters had expected new applications to fall to 275,000 last week.

The four-week moving average of claims, which smooths out week-to-week fluctuations and is therefore considered a better gauge of the labor market, rose 4,500 to 279,500 last week.

U.S. Treasuries erased some losses after the data, while the dollar trimmed gains against the euro and the yen. Stock index futures were unchanged.

The claims report covered the period which included the Independence Day holiday, but a Labor Department analyst said there was nothing unusual in the state level data last week. He did note that claims data tends to be volatile in July because of retooling by auto plants during that period.

%VIRTUAL-pullquote-Trend readings of both initial and continuing claims remain low from a historical perspective, which we expect to continue.%Jesse Hurwitz, an economist at Barclays Capital, said that because of the holiday and auto plant shutdowns, he was inclined to look past the volatility in the report.

"Trend readings of both initial and continuing claims remain low from a historical perspective, which we expect to continue," he said.

Continued claims -- the number of people still claiming jobless benefits after an initial week of aid -- rose 69,000 to 2.334 million in the week ended June 27, the Labor Department said.

The labor market has been tightening, with the unemployment rate not too far from the 5 percent to 5.2 percent range that most Federal Reserve officials consider consistent with full employment.

A government report last week showed employers adding 223,000 jobs in June, a slowdown from the prior month, and the U.S. unemployment rate sliding to 5.3 percent.