updated 6/2/2005 10:11:16 AM ET 2005-06-02T14:11:16

The Labor Department said Thursday that the number of Americans filing new claims for unemployment benefits shot up by 25,000 last week, the biggest weekly increase in 14 months.

Major Market Indices

Labor Department analysts blamed the increase, which pushed total claims to 350,000 last week, on temporary layoffs in the auto industry.

The jump, the biggest one-week gain since a rise of 27,000 in late January 2004, caught private economists by surprise. They had been forecasting that claims applications would remain basically unchanged from the 325,000 of the previous week.

The increase pushed total claims to the highest level in two months while the four-week moving average edged up to 334,500, the highest level since early April.

Still, economists said the labor market is continuing to show gradual improvement.

They believe the unemployment rate remained steady at 5.2 percent in May as the nation’s businesses created 180,000 new jobs. The government will release its estimates for employment last month on Friday morning.

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