US Initial Jobless Claims Rises To 372,000, Highest Level In 5 Weeks

The number of Americans lining up for new jobless benefits rose more than expected last week, the Labor Department said Thursday, suggesting little improvement in the labor market.

In the week ending Aug. 18, applications for unemployment insurance payments rose by 4,000 from the previous week's upwardly revised figure of 368,000 to 372,000. That was the highest level in five weeks. Economists polled by Reuters had forecast claims would climb to 365,000 last week.

A Labor Department official said the results are not affected by seasonal auto plant shutdowns.

The four-week moving average, which normally provides a better indication of the underlying trend in labor markets than the weekly number of jobless claims, increased by 3,750 to 368,000 for first-time benefit applicants.

The number of people filing for benefits after an initial week of aid increased rose 4,000 to 3.32 million in the week ending Aug. 11. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs. The four-week moving average for the week ended Aug. 11 was up by 6,500 to 3.31 million.

Job gains are of great importance, because they lead to income growth, and that supports consumer spending, which accounts for more than 70 percent of the U.S. economy.

July's jobs report showed that employers added 163,000 jobs in the month, a figure that was much better than the 95,000 jobs economists had called for. But unemployment unexpectedly rose to 8.3 percent, from 8.2 percent in June.

The minutes from the August Federal Open Market Committee meeting, released Wednesday, strongly suggest that the Fed will launch a third round of quantitative easing, or QE3, at its meeting in mid-September.

"Many [voting FOMC] members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery," the minutes said.

Some commentators had suggested in the past couple of weeks that the modest improvement in the most recent incoming economic data, particularly July's employment and retail sales figures, would be enough to persuade the Fed to hold off. But the alliterative "substantial and sustainable strengthening" language indicates that the Fed isn't going to be distracted by a modest pick-up in employment, not when the unemployment rate actually edged higher, according to Paul Ashworth, chief economist at Capital Economics.

Most estimates still have third-quarter gross domestic product growth tracking at between 1.5 percent and 2.0 percent annualized, only slightly above the first-quarter GDP performance.

Stock futures are mixed. The S&P 500 futures are currently up 0.11 percent, at 1,413.9 0, while the Dow Jones Industrial Average futures shed 0.08 percent, to 13,146.00.