updated 5/26/2011 9:06:27 AM ET 2011-05-26T13:06:27

More Americans applied for unemployment benefits last week, the first increase in three weeks and evidence that the job market is still sluggish.

Major Market Indices

The number of people seeking benefits rose by 10,000 to a seasonally adjusted 424,000, the Labor Department said Thursday. No states cited extreme weather as a factor in the increase, a department spokesman said. Tornadoes and floods have devastated several states in the Midwest and South in the past month.

Applications are above the 375,000 level that is consistent with sustainable job growth. Applications peaked at 659,000 during the recession.

Story: U.S. economy struggling to accelerate

Still, the four week average, a less volatile measure, declined for the first time in seven weeks to 438,500.

Employers stepped up hiring this spring, but some economists worry that rising applications indicate hiring is slowing.

A separate report showed that the economy grew 1.8 percent in the January-March quarter, a slowdown from the 3.1 percent annual pace recorded in the October-December period. Consumer spending grew at a much slower pace, as shoppers were held back by high unemployment and $4 a gallon gas.

So far, the economy has been generating jobs at a healthy pace this year. Businesses have added a net total of more than 250,000 jobs per month, on average, in the past three months, the fastest hiring spree in five years. The unemployment rate has dropped nearly a full percentage point in the past five months, though it remains a very high 9 percent.

The total number of people receiving benefits is also falling. The unemployment benefit rolls declined 46,000 to 3.7 million in the week ending May 14. That figure lags the applications data by one week.

Roughly 4 million additional people are receiving benefits under emergency programs enacted during the recession. All told, 7.7 million people received unemployment benefits during the week ending May 7, the most recent data available. That's a drop of almost 200,000 from the previous week.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Initial jobless claims rise


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