An increase in the number of people applying for unemployment benefits last week ended a three-week drop in requested government assistance. Some economists say this is evidence that the job market is still sluggish.
The Labor Department announced Thursday that the number of jobless benefit applications rose by 10,000 to a seasonally adjusted 424,000. Extreme weather was not cited as a factor in the increase, a department spokesman said.
The number of people seeking benefits is above the 375,000 level that is consistent with sustainable job growth. During the recession, applications peaked at 659,000.
"The job market isn't exactly improving with leaps and bounds," Jennifer Lee, an economist at BMO Capital Markets, said in a note to clients. "Businesses are hiring but are likely holding back until they're more comfortable and confident with the current economic environment."
The unemployment rate has dropped nearly a full percentage point in the past five months, though it remains a very high 9 percent.
Several economists said that the number of jobs added in May will likely dip below 200,000 for the first time since January.
"We're losing some momentum in employment," Brian Levitt, an economist at Oppenheimer & Co. told the Associated Press. He expects companies will create about 150,000 to 175,000 jobs this month. Higher gas prices are acting as a tax on consumers, restraining their spending, he said.