The number of U.S. workers filing initial claims for unemployment aid climbed 22,000 last week, while the overall number on the benefit rolls hit a 3-1/2 year high a week earlier, the U.S. government said on Thursday.
The report suggested a further deterioration in the jobs market, although the department said increases in first-time claims last week and the week before reflected, at least in part, a strike by auto workers.
The Labor Department said 378,000 initial claims for jobless benefits were filed in the week ended March 15, up from 356,000 in the prior week. Economists had expected a rise to just 360,000.
The increase pushed a four-week moving average of claims, which gives a better underlying signal on the state of the labor market, to 365,250, the highest level since October 2005 in the aftermath of Hurricane Katrina.
At the same time, the department said the number of idled workers who continued to draw benefits in the week ended March 8, the latest week for which the data was available, increased 32,000 to 2.865 million. This was the highest reading since August 2004.
"It does reflect some erosion in the labor market although not to a really significant degree yet," said Kim Rupert, managing director of global fixed income analysis at Action Economics LLC in San Francisco . "But so far the claims data at least and even a lot of the payroll data still aren't showing a recession per se in the economy."
A Labor Department official said that a strike by United Auto Workers union members at American Axle & Manufacturing Holdings had boosted the number of claims filed last week, although he was unable to say by how much. The department had said the same thing a week before.
American Axle & Manufacturing Inc., headquartered in Detroit, Michigan, is a manufacturer of automobile driveline, drivetrain, electronic integrated power units and chassis systems, as well as metal formed products. It was formed in 1994 from five of General Motors (GM) plants and continues to serve that manufacturer with suspensions, differentials, and similar components. American Axle also supplies parts to other OEM manufacturers around the globe.
Striking workers do not receive unemployment insurance. But the three week-old industrial action has shuttered dozens of North American auto plants and idled about 40,000 workers. Many of these workers will be judged to be out of work through no fault of their own, and therefore eligible for aid.