Jobless Claims Last Week Hit 8-Month High

The Labor Department said Thursday that applications rose by 43,000, to 474,000, in the week ended April 30, the third increase in four weeks. The four-week average, a less volatile measure, rose for the fourth consecutive week to 431,250.

Applications near 375,000 are typically consistent with sustainable job growth. Weekly applications peaked during the recession at 659,000.

Rising unemployment applications and other weak economic data this week have prompted some analysts to worry that higher fuel prices might be causing employers to slow hiring.

The government will release its April jobs report on Friday. Economists are projecting that the economy probably added 185,000 jobs in April and that the unemployment rate might remain at 8.8 percent, but some are now saying the numbers of added jobs could be lower.

Other factors also contributed to the increase in claims, a department spokesman said. Oregon started its own extended unemployment benefit program, which caused an increase in overall applications in the state for unemployment benefits. And auto-related layoffs rose, as some companies shut down or slowed production because of shortages of parts after the earthquake in Japan.

The sharp rise in claims in recent weeks has increased concerns that higher gasoline and food prices are cutting into consumer spending and slowing the economy. Businesses are also facing higher costs for raw materials, which reduce profit margins. They might be cutting hiring as a cost-saving measure.

Other recent data have also pointed to a weaker job market. A private trade group said Wednesday that a measure of employment growth in the service sector, which employs 90 percent of the work force, slowed for a second month. The report, by the Institute for Supply Management, still showed that employment rose, but at the slowest pace in seven months.

In another report, American companies squeezed more work out of their staffs in the first three months, but the gain in productivity was much slower than the previous three months.

The Labor Department said productivity rose at an annual rate of 1.6 percent in the January-March period, compared to a 2.9 percent increase in the previous quarter.

A slowdown in productivity growth is bad for the economy if it persists for a long period. But it can be good in the short term when unemployment is high, because it signals that companies must hire more workers to make further gains.

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