Initial Claims Rise 25,000 on Auto Layoffs

Temporary layoffs in the U.S. auto industry helped push initial claims (search) for jobless benefits up by a sharper-than-expected 25,000 last week, according to a government report on Thursday that suggested little change in the underlying pace of layoffs.

First-time claims for state unemployment aid (search) climbed to 350,000 in the week ended May 28 from a revised 325,000 the prior week, the Labor Department (search) said. That was the highest reading since late March.

An analyst with the department said comments from individual states indicated "a good portion" of the rise was due to temporary auto industry layoffs, unrelated to regular summer plant shutdowns for retooling, which take place in July.

Economists had expected initial claims to inch up to 325,000 from the 323,000 initially reported for the prior week.

The larger-than-expected gain pushed a four-week moving average of claims, which smooths weekly volatility to provide a clearer view of trends, up 3,500 to 334,500, its highest level since early April.

The number of Americans who remained on the benefit rolls after claiming an initial week of aid also moved higher, rising 32,000 to 2.60 million in the week ended May 21, the latest period for which figures are available.