More people a claim for unemployment benefits

WASHINGTON - more people last week a request for unemployment benefits, the first increase in three weeks and the evidence that the labour market is still sluggish.

The number of people seeking benefits increased by 10 000 a 424,000 seasonally adjusted, the Labour Ministry said Thursday. No State cited extreme weather as a factor in the increase, said a spokesman for the Department. Tornadoes and flooding have devastated several States of the Midwest and the South in the month.

Applications are above the level of 375,000 is consistent with the sustainable employment growth. Applications peaked at 659,000 during the recession.

"The labour market is not exactly improve with leaps and bounds," Jennifer Lee, an economist at BMO Capital markets, said in a note to clients. "Companies are hiring but likely to return until they are more comfortable and more confident in the current economic environment."

Yet, the average of four weeks, less volatile measure, declined for the first time in seven weeks to 438,500.

Employers stepped up hiring this spring, but some economists fear that rising applications indicate hiring slows.

A separate report showed the economy grew 1.8% in the January-March quarter, a slowdown of the 3.1% annual pace recorded in the period from October to December. Consumer spending increased at a much slower pace, as shoppers were selected by a high unemployment and $4 a gallon gas.

Until now, the economy has been generating jobs at a healthy pace this year. Companies have added that a total of more than 250,000 jobs a month, on average, over the last three months, faster spree of hiring over five years. The unemployment rate declined nearly a point of percentage in the last five months, though it remains a very high 9 percent.

But several economists said that the number of additional jobs for may will probably dip less than 200 000 for the first time since January.

"We will lose some momentum in employment," said Brian Levitt, an economist at OppenheimerFunds. He expects companies to create approximately 150 000 to 175 000 jobs this month. Higher gas prices act like a tax on consumers, prohibiting their spending, said.

Gasoline prices dipped to an average of $3.81 per gallon Thursday, down $3.91 a week ago. But they are $1.04 more than last year.

The total number of persons receiving benefits is also declining. The allocation of unemployment rolls decreased by 46 to 3.7 million in the week ending May 14. This figure is data from applications to a week.

Approximately 4 million additional people receive benefits under emergency programmes adopted during the recession. Altogether, 7.7 million people receiving benefits for unemployment during the week ending May 7, the latest available data. This is a decrease of nearly 200 000 from the previous week.