Rising Jobless Claims Spook Market

The jobs market is still threatening the rebounding U.S. economy, as the number of people filing new claims for unemployment benefits rose unexpectedly last week, in the largest jump seen in three months.

The Labor Department reported Thursday that applications for unemployment rose to 471,000 last week, a 25,000 jump from the prior week, which marked the first increase in five weeks and was the largest surge since 40,000 new claims were seen in February.

Economists had expected claims for last week to fall by 4,000 from the previous week.

The jobs data has done nothing to help the already faltering stock markets that are also dealing with concerns from the euro zone. In midday movement the Dow Jones industrial average is down 244.22 to 10,202.15.

The current total is the highest it has been since standing at 480,000 on April 10, while the four week average also increased to 453,500.

Employers are turning towards hiring, but the positions being filled are not at levels needed to bring down the unemployment rate, which jumped to 9.9 percent in April.

The unemployment rate increased last month due to workers that had given up on finding work returning to the improving jobs market. Payrolls increased in April by 290,000 jobs, which was the largest gain in four years.

The number of workers receiving jobless benefits dropped by 40,000 to 4.63 million, but that number does not include all of those who have surpassed the regular 26 weeks of benefits that are customarily given.

Many workers are now receiving as many as 73 additional weeks of unemployment benefits in the struggling jobs market. In the U.S., 5.3 million people were receiving extended unemployment benefits as of the week ended May 8.