Jobless claims jump in latest week

NEW YORK (CNNMoney.com) -- The number of Americans filing for initial unemployment insurance climbed last week, the government said Thursday.

There were 464,000 initial jobless claims filed in the week ended July 17, up 37,000 from a revised 427,000 the previous week, the Labor Department said.

The number of claims was much higher than expected. A consensus estimate of economists surveyed by Briefing.com expected new claims to rise to 445,000.

"It's very disappointing to have this leading indicator of economic conditions jump higher," said John Lonski, chief economist at Moody's Economy.com. "This is the latest reminder of a weak labor market, and the jump preserves worries regarding the adequacy of economic growth."

The 4-week moving average of initial claims, which is calculated to smooth out volatility, was 456,000, up 1,250 from the previous week's revised average of 454,750.

Continuing claims: The government said 4,487,000 people filed continuing claims in the week ended July 10, the most recent data available. That's down 223,000 from the preceding week's upwardly revised 4,710,000 claims.

Economists surveyed by Briefing.com expected ongoing claims to edge lower to 4,600,000 from the unrevised 4,681,000 in the previous week.

The 4-week moving average for ongoing claims fell by 21,500 to 4,567,000 from the preceding week's revised 4,588,500.

Outlook: Lonski said the latest rise in jobless claims is consistent with worries about the labor market, consumer spending and the general health of the U.S. economy.

"The jump in jobless claims signals more coming in the way of a slack labor market that will curb the growth of wages and employment income, and thereby consumer spending," he said. "And this just reinforces a mediocre or lackluster outlook for job growth going forward."

Earlier this month, the government said the U.S. economy lost jobs in June for the first time this year. And Lonski said that given the lack of improvement in the labor market and consumer sentiment, we could be in store for another gloomy jobs report next month.

"This is a warning that we are unlikely to receive an upside surprise in the form of a better-than-expected reading on July payrolls," said Lonski. "Despite doing better in terms of profitability and sales, companies have not stopped laying off staff and are not yet in an expansionary mode."