Unemployment Applications Jump by Most in a Month

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A new report from the Labor Department shows U.S. job market is weakening.

Applications rose by 9,000 to a seasonally adjusted 429,000 last week, the Labor Department said Thursday. It was the second increase in three weeks and the 11th straight week that applications have been above 400,000.

"We need initial claims to fall back below 400,000 to signal stronger economic growth than the area we seem to be mired in," said John Ryding and Conrad DeQuadros, analysts at RDQ Economics.

Economists said the June trend in unemployment applications was consistent with modest payroll growth of around 130,000 per month.

Employers added only 54,000 net new jobs in May, much slower than the average gain of 220,000 per month in the previous three months.

The Federal Reserve acknowledged on Wednesday that the economy has slowed in recent months. Fed officials also said in a statement summing up their two-day meeting that "recent labor market indicators have been weaker than anticipated."

Fed officials said in a statement that they think the main causes of the economy's slowdown, such as high gas prices and supply disruptions from Japan's disasters, are temporary. Once those problems subside, Fed officials said the economy should rebound.

But at a news conference after the statement was released, Federal Reserve Chairman Ben Bernanke acknowledged that some of the problems slowing the economy could persist into next year. He cited continued weakness in the financial sector and persistent problems in the housing market.

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