Jobless claims unexpectedly rose last week

The number of workers filing new applications for jobless benefits unexpectedly rose last week, according to a government report on Thursday that pointed to a labor market still under stress even as the economy grows.

Initial claims for state unemployment benefits increased 8,000 to a seasonally adjusted 480,000 in the week ended January 30, the Labor Department said.

Analysts polled by Reuters had forecast claims falling to 460,000 from a previously reported 470,000.

A Labor Department official described the report as "straight forward." Delays in processing applications due to short staffing at some state employment offices over the holidays resulted in a backlog that distorted claims data over the past weeks.

Unemployment, which is lagging the broader economic recovery, is one of President Barack Obama's toughest challenges. Unhappiness over unemployment cost Obama's Democrats a crucial Senate seat last month and threatens big losses for the party in the November congressional elections.

The four-week moving average for new claims rose 11,750 to 468,750 last week. The four-week moving average, considered a better gauge of underlying trends, rose for a third week after falling for 19 weeks.

The number of workers still collecting benefits after an initial week of aid increased 2,000 to 4.60 million in the week ended January 23. This was above market expectations for 4.58 million. So-called continuing claims remained below 5 million for the sixth week.

The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, was unchanged at 3.5 percent in the week ended January 23.