The number of people applying for unemployment benefits jumped last week to the highest level in three months, another sign that the job market remains depressed.
The Labor Department said Thursday that weekly applications rose by 11,000, to a seasonally adjusted 428,000. The week included the Labor Day holiday.
Applications typically drop during short work weeks. In this case, applications didn't drop as much as the department expected, so the seasonally adjusted value rose. A Labor spokesman said the total wasn't affected by Hurricane Irene.
Still, applications appear to be trending up. The four-week average, a less volatile measure, rose for the fourth straight week, to 419,500.
Applications need to fall below 375,000 to indicate that hiring is increasing enough to lower the unemployment rate. They haven't been below that level since February.
The economy added zero net jobs in August, the worst showing since September 2010. The unemployment rate stayed at 9.1 percent for the second straight month.
The job figures were weak because companies hired fewer workers and not because they stepped up layoffs, economists said. Business and consumer confidence fell last month after a series of events renewed recession fears.
The government reported that the economy barely grew in the first half of the year. Lawmakers fought over raising the debt ceiling. Standard & Poor's downgraded long-term U.S. debt for the first time in history. Stocks tumbled — the Dow lost nearly 16 percent of its value from July 21 through Aug. 10.
Businesses added only 17,000 jobs in August, which was a sharp drop from 156,000 in July. Government cut 17,000 jobs. Combined, total net payrolls did not change.
Unemployment benefit applications are considered a measure of the pace of layoffs.
The total number of people receiving benefits dipped 12,000, to 3.73 million, the third straight decline. But that doesn't include about 3.4 million additional people receiving extended benefits under emergency programs put in place during the recession. All told, about 7.14 million people received benefits for the week ending Aug. 27, the latest data available.
More jobs are desperately needed to fuel faster economic growth. Higher employment leads to more income. That boosts consumer spending, which accounts for about 70 percent of economic growth.
Higher gas and food prices have cut into their buying power this year. The economy expanded at an annual rate of just 0.7 percent, the slowest growth since the recession officially ended two years ago.
The weakness has raised pressure on the Federal Reserve and the White House to take steps to boost economic growth.
Many economists expect they will decide at its meeting next week to shift money out of short-term mortgage-backed securities and into longer-term Treasury bonds. The move could push down longer-term interest rates, including rates on mortgages, auto loans and other consumer and business borrowing.
President Barack Obama has proposed a $447 billion job-creation package. He wants to cut Social Security taxes for workers, extend unemployment benefits, cut taxes for small businesses and spend more federal money to build roads, bridges and other public works projects.
Republicans oppose the president's plan, particularly after he said he wants to pay for it with higher taxes on wealthier households, hedge fund managers and oil companies.