New jobless claims rise, but total claims lowest since April

WASHINGTON -- The number of newly laid-off workers seeking jobless benefits rose last week, though the government said its report again was distorted by the timing of auto plant shutdowns, and the number of people on the jobless benefit rolls was the lowest level since mid-April.

The Labor Department said Thursday that its tally of initial claims for unemployment insurance rose 30,000 to a seasonally adjusted 554,000. That's above analysts' estimates of 550,000.

The increase follows two straight weeks of sharp drops largely because automakers didn't lay off as many workers as expected in early July. General Motors and Chrysler temporarily shut down many of their plants earlier than usual this year, in May and June, after filing for bankruptcy protection and restructuring their companies.

A department analyst said the government's seasonal adjustment process expected claims to drop sharply last week, after the normal pattern of auto layoffs was complete. But that didn't happen, causing seasonally-adjusted claims to rise.

Weekly claims remain far above the 300,000 to 350,000 that analysts say is consistent with a healthy economy. New claims last fell below 300,000 in early 2007. The lowest level this year was 488,000 for the week ended Jan. 3.

The total jobless benefit rolls, meanwhile, fell a more-than-expected 88,000 to 6.2 million, the lowest level since mid-April. And the four-week moving average of claims, which normally smooths out some volatility, fell 19,000 to 566,000.

But the number of people on emergency extended state and federal programs continued to rise. Unemployment insurance recipients can receive up to 53 weeks of additional benefits from the emergency programs, on top of the 26 weeks typically provided by the states.

When the extended benefit rolls are included, more than 9.1 million people received jobless benefits for the week of July 4, the latest data available.

The recession, which started in December 2007 and is the longest since World War II, has eliminated a net total of 6.5 million jobs. The unemployment rate in June rose to 9.5%, a 26-year high.