Jobless Claims Rose, but Consumer Spending Picks Up Speed Too

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/ Source: Reuters

The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, but the underlying trend continued to point to improving labor market conditions.

In a separate report giving a snapshot of the economy, consumer spending recorded its largest increase in more than four and a half years in March, cementing views the economy ended a dismal first-quarter on solid footing.

People seeking employment fill out applications at a job fair in Detroit. The number of Americans filing for unemployment benefits rose unexpectedly last week.Joshua Lott / Getty Images

Initial claims for state unemployment benefits increased 14,000 to a seasonally adjusted 344,000 for the week ended April 26, the Labor Department said on Thursday. That was the highest level since February.

Economists polled by Reuters had forecast first-time applications for jobless benefits falling to 319,000.

Claims are volatile around this time of the year because the timing of the Easter and Passover holidays and school spring breaks makes it difficult to adjust for seasonal fluctuations.

The four-week moving average for new claims, considered a better measure of underlying labor market conditions as it irons out week-to-week volatility, rose only 3,000 to 320,000.

Meanwhile, the Commerce Department said that consumer spending increased 0.9 percent after rising by a revised 0.5 percent in February. March's gain was the biggest since August 2009.

Economists polled by Reuters had forecast consumer spending, which accounts for more than two-thirds of U.S. economic activity, rising 0.6 percent in March.

- Reuters