Jobless claims up more than expected

Weekly claims grew by 11,000 to 330,000; continued claims climb 38,000 to 2.59 million.
May 5, 2005: 8:35 AM EDT


WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment aid rose a larger-than-expected 11,000 last week but stayed in a range consistent with job growth, a government report showed Thursday.

Initial claims for jobless benefits climbed to 333,000 in the week ended April 30 from a revised 322,000 the prior week, the Labor Department said.

Economists had expected claims to edge up to 325,000 from the 320,000 the government initially said were filed in the week ended April 23.

Initial claims dropped as low as 299,000 earlier last month, but economists dismissed that low level as a reflection of data volatility around the Easter holiday and school spring breaks.

A four-week moving average of first-time claims, which smoothes weekly volatility to provide a clearer view of job-market trends, slipped 2,000 to 321,5000, its lowest level in nearly two months.

The report, however, showed the total number of unemployed still on the benefit rolls after an initial week of aid climbed 38,000 to 2.59 million in the week ended April 23, the latest week for which the figures are available.

While that partly reversed sizable declines in the prior three weeks, a four-week average of these so-called continued claims moved down to 2.61 million, the lowest level since April 2001, just after the U.S. economy tumbled into recession.

The data comes ahead of a government report on April job creation due Friday. Economists expect nonfarm payrolls rose by 170,000 last month. In March, only 110,000 new jobs were created, the smallest gain in eight months and one that fueled concern about an economic slowdown.

Federal Reserve officials took note of recent soft data but showed faith in the economy's expansion as they raised the bellwether federal funds rate on Tuesday by a quarter-percentage point to 3 percent.

"Labor market conditions ... apparently continue to improve gradually," the Fed said in a statement announcing its rate action.