New US claims for unemployment benefits rose unexpectedly last week, highlighting continued labour market weakness.
Initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 465,000, the Labor Department said today, breaking two straight weeks of declines.
Analysts had forecast claims unchanged at 450,000. The prior week's figure was revised up to 453,000.
Last week's claims data covered the survey period for the government's closely watched employment report for September, scheduled for release early next month.
US stock index futures slightly added to losses after the report, while government debt prices extended gains. The US dollar fell against the yen.
A Labor Department official said only one state had been estimated for last week's claims report and noted that applications for jobless benefits tend to rise in the week following a holiday.
The four-week average of new jobless claims, considered a better measure of underlying labour market trends, fell 3,250 to 463,250, the lowest since July 31.
The labour market has been showing modest signs of improvement after a setback in the second quarter as economic growth slowed sharply.
Relentlessly high unemployment is crimping consumer spending and the Federal Reserve on Tuesday signalled it would, if needed, inject more money into the economy to shore up the recovery and avert a damaging downward spiral in prices.
The central bank already has cut overnight interest rates to near zero and pumped more than $1.7 trillion into the economy with purchases of Treasury and mortgage-related debt.
Stimulating the lethargic economy is a major challenge for US president Barack Obama, and a wave of voter anger over a 9.6 per cent unemployment rate could cause the Democratic Party to lose control of Congress to Republicans in the November 2nd mid-term election.
"One of the biggest reason why companies are reluctant to hire is uncertainty, not so much political uncertainty as it is being touted, but because of the lack of faith that revenue and profitability could be sustained going forward," said Guy Lebas, chief fixed income strategist at Janney Montgomery Scott in Philadelphia.
Despite the bump up in new applications for unemployment benefits last week, claims are holding well below a nine-month high of 504,000 touched in mid-August.
The number of people still receiving benefits after an initial week of aid dropped 48,000 to 4.49 million in the week ended September 11th from an upwardly revised 4.54 million the prior week.
The insured unemployment rate, which measures the percentage of the insured labour force that is jobless, dipped to 3.5 per cent during that period from 3.6 per cent the prior week.
The number of people on emergency benefits increased 113,785 to 4.2 million in the week ended September 4th.
Reuters