US jobless claims edge up last week

The number of US workers filing new claims for unemployment benefits rose slightly more than expected last week, but the number of workers staying on jobless roles fell to the lowest in three months, government data showed on Thursday.

Initial claims for state unemployment insurance benefits rose 25,000 to a seasonally adjusted 584,000 in the week ended July 25, the Labor Department said, a touch above market expectations for a reading of 570,000.

However, the four-week moving average for new claims, considered to be a better gauge of underlying trends as it irons out week-to-week volatility, fell by 8,250 to 559,000. This was the lowest level since late January.

The weekly moving average has declined for five straight weeks. A Labor Department official said the trend in claims was now backing to where it would have been without July distortions caused by the timing of auto plant shutdowns.

US stock index futures extended gains on the data which bolstered views that the recession was starting to ebb. US government bond prices fell, while the dollar gained versus the yen.

"The headline number in the jobless claims report was slightly worse than expected, but the continuing claims component was getting better so that bodes well for the US economy going forward," said Matthew Strauss, senior currency strategist at RBC Capital in Toronto.

Continuing claims -- the number of people staying on the benefit rolls after collecting an initial week of aid -- fell by 54,000 to 6.20 million in the week ended July 18, the latest week for which the data is available.

This was the lowest since early April and marked the third straight week that this measure had declined.

Recent data, including home sales and prices, have added to growing optimism the recession is ending, but high unemployment continues to weigh on consumer sentiment, meaning that the economy's recovery will be feeble.

Analysts have been closely monitoring initial jobless claims for signs of stability in the labor market, which has been hard hit by the 19-month old recession.

The insured unemployment rate, which measures the per centage of the insured labor force who are jobless, was unchanged at 4.7 per cent.