WASHINGTON — The number of newly laid-off workers seeking unemployment benefits rose last week, a sign that jobs remain scarce even as the economy recovers.
The increase also may result from the difficulty the Labor Department has in seasonally adjusting the claims around the Easter holiday, which falls on different weeks each year.
"This is ... a volatile time when the numbers move around quite a bit," a department analyst said.
The Labor Department said Thursday that first-time claims increased by 18,000 in the week ended April 3, to a seasonally adjusted 460,000. That's worse than economists' estimates of a drop to 435,000, according to a survey by Thomson Reuters.
California also closed its state offices for a holiday on March 31, which likely held down the claims figures. On an unadjusted basis, claims rose by 6,500 to nearly 415,000.
Initial claims have dropped four out of the past six weeks and many economists say they are likely to soon resume their decline.
"Not everything goes in a straight line," Jennifer Lee, senior economist at BMO Capital Markets, wrote in a research note. "Definitely not the claims data."
Separately, retail sales jumped last month as warmer weather and the Easter holiday brought out shoppers in droves.
Discounter Target Corp., department store Macy's Inc., clothier Gap Inc. and Victoria's Secret parent Limited Brands Inc. posted double-digit increases that beat Wall Street analysts' expectations.
Overall, sales in stores open at least a year rose 9 percent in March, based on an index of 31 retailers compiled by the International Council of Shopping Centers.
The stock market dropped in morning trading. The Dow Jones industrial average fell 28 points while broader indexes also dipped.
Economists closely watch unemployment insurance filings, which are seen as a gauge of layoffs and a measure of companies' willingness to hire new workers.
The four week average, which smoothes volatility, rose to 450,250. Two weeks ago, the average fell to its lowest level since September 2008, when Lehman Brothers collapsed and the financial crisis intensified.
Jobless claims peaked during the recession at 651,000 in late March 2009.
The figures underscore that the job market remains weak even as the economy recovers. Federal Reserve Chairman Ben Bernanke said Wednesday that high unemployment is one of the toughest challenges the economy faces.
While layoffs have slowed, hiring is "very weak," he said.
"We are far from being out of the woods," Bernanke said in a speech in Dallas. "Many Americans are still grappling with unemployment or foreclosure or both."
On a more positive note in the Labor Department's report, the tally of people continuing to claim benefits fell by 131,000 to 4.55 million, the lowest level since December 2008.
That figure lags initial claims by a week. But it doesn't include millions of people who have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government.
Slightly more than 5.8 million people were receiving extended benefits in the week ended March 20, the latest data available, a drop of about 230,000 from the previous week. The extended benefit data isn't seasonally adjusted and is volatile from week to week.
Other recent reports have indicated that employers are slowly ramping up hiring. The Labor Department said Friday that the nation added a net total of 162,000 jobs in March, the most in three years. The unemployment rate held at 9.7 percent for the third straight month.
Layoffs fell to their lowest level in three years in February, according to a separate government report Tuesday. But hiring remained about 40 percent below pre-recession levels.
Some companies are still cutting jobs. An oilfield services company, Denver-based EnerCrest, said this month it has closed five locations in four states, losing 225 employees. Business software company Computer Associates Inc. said Tuesday that it is cutting 1,000 jobs as part of a plan to reduce costs.
Some recipients of the extended federal aid could see their benefits disrupted this week, as Congress failed to approve a continuation of the federal programs before leaving for a two-week vacation at the end of March.
That could cut off benefits for more than 200,000 people this week, according to the National Employment Law Project, an advocacy group, but Congressional Democratic leaders have said they will make up for the lost checks when they extend the program later this month.
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