While the surprise jump in initial claims for unemployment benefits was attributed to factors ranging from spring break layoffs to the introduction of an emergency benefits program, economists said it corroborated reports this week indicating a loss of momentum in job creation.
New claims for state jobless benefits rose 43,000 to a seasonally adjusted 474,000, the highest since mid-August, the Labor Department said on Thursday. Economists had expected claims to fall to 410,000.
A second report from the department showed nonfarm productivity increased at a 1.6 percent annual rate, braking from a 2.9 percent pace in the fourth quarter. The growth pace was above economists' expectations for 1 percent.
"We do not think that the entire rise in claims over the last month can be explained by special factors alone," said Harm Bandholz, chief U.S. economist at UniCredit Research in New York. "It seems instead as if the improvement in the labor market slowed a bit."
Reports this week showed weaker employment growth in the manufacturing and services sectors in April. Data from payrolls processing firm ADP Employer Services also showed a step back in private hiring last month. (read more)