Unemployment claims rose sharply to the highest level since January according to a weekly U.S. Labor Department report.
The 380,000 new unemployment filings came as a surprise to many analysts who were predicting a decline in unemployment. This week’s increase, the second week in a row, is up 13,000 from last week.
The report shows the four-week moving average in initial unemployment claims also bumped up 4, 250 for a total of 368,500.
The numbers indicate an increase in layoffs coming on the heels of a disappointing jobs report for March. Only 120,000 new jobs were created in March which pales in comparison to the amount of jobs necessary to signal economic growth in the jobs market.
Analysts who had been touting slow economic growth are concerned the bad economic news on the jobs front may be a harbinger for a late-spring economic slump which raises questions about the actual strength of the U.S. economic recovery.
During the last two years the economy faltered similarly however with average gas prices already close to $4 per gallon, many Americans are wary of the fragile and unpredictable economy.
Rising consumer prices coupled with high gas prices at the pump in an economy so shaky that employers are holding the line on labor costs may signal an even longer economic slump than was expected.
In a recent note to clients, Michael Gapen
of Barclays Capital Research, says, "Altogether, the trends in initial jobless claims appear to have flattened out in recent weeks, consistent with the softer rate of payroll growth in the March employment report. We look to coming claims reports to see if this is a pause in the broader downward trend, or signs of something more durable in nature."
At the same time, economic woes across Europe are feeding the flames of uncertainty in U.S markets.