US weekly jobless claims up 25,000 to 384,000 UPDATE - Forbes.com

WASHINGTON (Thomson Financial) - The number of individuals filing new claims for unemployment insurance rose above expectations, while the number of those continuing to receive unemployment insurance rose to its highest level in more than four years, the Labor Department said on Thursday.

The number of first-time claims filed in the week ending June 7 increased 25,000 to 384,000, well above the 365,000 claims economists polled by Thomson Reuters IFR Markets were expecting. Initial claims in the previous week were upwardly revised by 2,000 to 359,000.

A Labor Department official said some of the increase in the report may have been due to volatility in the seasonal adjustment factors.

'This number strongly supports our view that last week's drop in claims was due to seasonal adjustment problems caused by the Memorial Day holiday,' said Ian Shepherdson of High Frequency Economics. 'We now expect claims to hover around this level for the next few weeks, before the annual chaos caused by the automakers' retooling shutdowns begins.'

Labor reported that the four-week moving average for initial claims increased 2,500 to 371,500. Economists prefer the four-week moving average because it smoothes out fluctuations in weekly data.

'The key point here is that the underlying trend in claims continues to grind higher, as it should at this point in the cycle,' Shepherdson said.

For the week ended May 31, the number of individuals continuing to receive unemployment insurance rose by 58,000 to 3.139 mln, above the 3.120 mln claims economists were expecting. Continuing claims in the week reached their highest level since February 2004. Continuing claims in the previous week were downwardly revised by 12,000 to 3.081 mln.

The four-week moving average for continuing unemployment claims increased 16,500 to 3.099 mln, the highest level since February 2004. Contiuing claims measure on a four-week moving average basis are 23.7 pct higher than they were a year ago, 'which is indicative of considerably weaker labor market conditions because it indicates that those who are unemployed are finding it increasingly difficult to get re-employed,' said Joshua Shapiro of MFR.

tessa.moran@thomsonreuters.com

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