updated 12/2/2004 9:14:50 AM ET 2004-12-02T14:14:50

The number of new people signing up for unemployment benefits rose sharply last week but the overall level of applications still points to a recovering job market.

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The Labor Department reported Thursday that new filings for unemployment insurance increased by a seasonally adjusted 25,000 to 349,000 for the week ending Nov. 27, which included the Thanksgiving Day holiday. Some analysts were expecting a smaller rise _ of around 7,000.

Private economists and Labor Department analysts say claims around Thanksgiving and other holidays are typically more volatile _ meaning that they can bounce around a lot more from week to week in part because of seasonal adjustment difficulties.

The unadjusted figure for new claims last week showed a steep decline of more than 36,000.

Last week's level of claims at 349,000 is consistent with a labor market in recovery, analysts say.

The number of people continuing to collect unemployment benefits, meanwhile, dropped by a sharp, seasonally adjusted 20,000 to 2.72 million for the week ending Nov. 20, the most recent period for which that information is available. That marked the lowest level since late April 2001.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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