New U.S. jobless claims fell last week

Attendees line up for an interview with a prospective employer at a job fair in Washington, August 6, 2009.

WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless benefits fell last week, but the prior period's figure was revised up, according to a government report on Thursday that highlighted the fragility of the labor market.

Initial claims for state unemployment insurance benefits fell 4,000 to a seasonally adjusted 570,000 in the week ended August 29 from an upwardly revised 574,000 the prior week, the Labor Department said.

Analysts polled by Reuters had forecast new claims falling to 560,000 last week from a previously reported 570,000.

U.S. stock index futures pared gains after the report, while government bond prices trimmed losses.

"At this point, with all the stimulus money as well as seasonal factors, we should be seeing the jobless number below 500,000. This is looking more and more like a jobless recovery," said Todd Schoenberger, Managing Director at Landcolt Trading in San Antonio, Texas.

Data continue to indicate a recovery from the worst recession since the Great Depression of the 1930s is under way, but anemic consumer spending as a result of high unemployment has raised fears the turnaround will be tepid.

While the pace of layoffs has slowed considerably from early this year, companies remain reluctant to start aggressively hiring, waiting for a strong signal the recovery will be sustained. The economy slipped into recession in December 2007.

The government's payrolls report for August to be released on Friday is expected to show employers shed another 225,000 jobs last month.

The four-week moving average for new jobless claims, considered a better gauge of underlying trends as it irons out week-to-week volatility, rose 4,000 to 571,250 last week, the Labor Department said.

The number of people collecting long-term unemployment benefits rose 92,000 to 6.23 million in the week ended August 22, the latest week for which the data is available, indicating that companies remained reluctant to expand payrolls, despite an improvement in the economy's outlook.

That was well above market expectations for 6.12 million.

However, the four-week moving average fell 27,250 to 6.22 million. The insured unemployment rate, which measures the percentage of the insured labor force who are jobless, inched up to 4.7 percent in the week ended August 22 from 4.6 percent the prior week.

(Reporting by Lucia Mutikani; Additional reporting by Richard Leong in New York; Editing by Andrea Ricci)