New jobless claims increase unexpectedly

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The number of newly laid-off workers seeking unemployment benefits rose last week, a sign that jobs remain scarce even as
the economy recovers.

The Labor Department said Thursday that first-time claims increased by 18,000 in the week ending April 3, to a seasonally
adjusted 460,000. That's worse than economists' estimates of a drop to 435,000, according to a survey by Thomson Reuters.

The report covers the week that includes the Easter holiday, and a Labor Department analyst said seasonal adjustment for
Easter can be difficult since the holiday occurs in different weeks each year.

California also closed its state offices for a holiday March 31, the analyst said, which likely held down the claims figures.
On an unadjusted basis, claims rose by 6,500, to nearly 415,000.

Economists closely watch unemployment claims, which are seen as a gauge of layoffs and a measure of companies' willingness
to hire new workers.

The four-week average, which smooths volatility, rose to 450,250. Two weeks ago, the average fell to its lowest level since
September 2008, when Lehman Brothers collapsed and the financial crisis intensified.

Jobless claims peaked during the recession at 651,000 in late March 2009.

The figures underscore that the job market remains weak even as the economy recovers. Federal Reserve Chairman Ben Bernanke
said Wednesday that high unemployment is one of the toughest challenges the economy faces.

While layoffs have slowed, hiring is "very weak," he said. "We are far from being out of the woods. Many Americans
are still grappling with unemployment or foreclosure or both."

On a more positive note in the Labor Department's report, the tally of people continuing to claim benefits for more than
a week fell by 131,000, to 4.55 million, the lowest level since December 2008.

That figure lags initial claims by a week. But it doesn't include millions of people who have used up the regular 26
weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for
by the federal government.

Slightly more than 5.8 million people were receiving extended benefits in the week ended March 20, the latest data available,
a drop of about 230,000 from the previous week. The extended benefit data isn't seasonally adjusted and is volatile from
week to week.

Other recent reports have indicated that employers are slowly ramping up hiring. The Labor Department said Friday that the
nation added a net total of 162,000 jobs in March, the most in three years. The unemployment rate held at 9.7 percent for
the third straight month.

Layoffs fell to their lowest level in three years in February, according to a separate government report Tuesday. But hiring
remained about 40 percent below pre-recession levels.

Some companies are still cutting jobs. An oilfield services company, Denver-based EnerCrest, said this month it has closed
five locations in four states, losing 225 employees. Business software company Computer Associates Inc. said Tuesday that
it is cutting 1,000 jobs as part of a plan to reduce costs.

Some recipients of the extended federal aid could see their benefits disrupted this week, as Congress failed to approve a
continuation of the federal programs before leaving for a two-week vacation at the end of March.

That could cut off benefits for more than 200,000 people this week, according to the National Employment Law Project, an
advocacy group, but Congressional Democratic leaders have said they will make up for the lost checks when they extend the
program later this month.

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