NEW YORK (CNNMoney.com) -- The number of Americans filing continuing claims for unemployment insurance spiked last week, the Labor Department said Thursday, as sluggish hiring continues to drag on the labor market's recovery.
The number of people filing continuing claims jumped to 4,558,000 in the week ended Feb. 27, the most recent data available. That was up 37,000 from the preceding week's upwardly revised 4,521,000 claims.
Economists were expecting continuing claims to remain unchanged at 4,500,000.
Continuing claims reflect people filing each week after their initial benefit week until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved into state or federal extensions, or people whose benefits have expired.
"Continuing claims represent the pool of workers who have been unable to get back into the labor market quickly," said Robert Dye, senior economist at PNC Financial Services Group. "Long-term unemployment remains a significant problem and will remain a drag on the economy, as it has for some time now."
Dye said the reluctance of small businesses to commit to hiring adds substantial pressure to a jobs recovery.
"The climate for hiring is highly uncertain at small businesses, with health care legislation still pending and tax policies in flux," he said. "I think it will take months before we see hiring there."
Wells Fargo senior economist Mark Vitner added that the sharp increase in continuing claims in the latest data could also be because severe winter weather hindered employers from hiring.
Last week, lawmakers pushed the deadline to apply for unemployment claims to April 5, but the Senate approved a measure Wednesday to extend the deadline until year-end. The bill has moved to the House for approval.
There were 462,000 initial claims filed in the week ended March 6, down 6,000 from the previous week's downwardly revised 468,000, A consensus estimate of economists surveyed by Briefing.com expected claims to drop to 460,000.
The 4-week moving average of initial claims, which levels out volatility, was 475,500, up 5,000 from the previous week's downwardly revised average of 470,500.
"Initial claims are improving, but they are stalling at the current level and are still too high to create sustained job growth," Vitner said. "In a healthy economy that is functioning normally, jobless claims need to come to closer to 350,000."
Vitner said hiring at the Census Bureau to conduct the 2010 Census will improve jobless claims data in the coming months, but warned that those jobs are only temporary.
"Excluding any Census hiring, we'll be hard pressed to see job growth in March. There's a high probability that the unemployment rate will rise again because hiring is not picking up fast enough, and layoffs are not slowing down enough," Vitner said.
State-by-state: Unemployment claims in eight states fell more than 1,000 for the week ended Feb. 27, the most recent data available. Claims in Pennsylvania dropped the most, by 4,772, which a state supplied comment said was due to fewer layoffs in the construction, service, transportation and industrial machinery industries.
A total of four states said the claims rose by more than 1,000. Claims in California jumped the most, by 16,112, which the state attributed to layoffs in the service industry and to the return to a 5-day work week. The previous week was shortened by a holiday observing President's Day.
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