May 15, 2008 / 1:13 PM / in 10 years

UPDATE 1-U.S. jobless claims rise 6,000 in latest week

(Adds market reaction, analyst comment)

WASHINGTON, May 15 (Reuters) - The number of U.S. workers filing claims for initial jobless benefits rose by 6,000 in the latest week while the number on benefit rolls after a first week of aid hit a four-year high, a government report showed on Thursday.

First-time jobless claims rose to 371,000 in the week ended May 10 from 365,000 for the prior week. Economists surveyed by Reuters had forecast the number of new claims at 370,000.

The four-week moving average of new claims, considered by economists a more reliable gauge of labor trends because it irons out weekly volatility, fell to 365,750 in the week ended May 10 from 366,750 in the prior week.

“These numbers are not good news. We are in an elevated unemployment period because of tight credit, higher oil prices, inflation hurting consumers,” said Kurt Karl, chief U.S. economist at Swiss Re in New York.

“To me, it just continues to deteriorate. It’s just grinding higher in unemployment,” Karl said.

U.S. Treasury debt prices turned higher after the jobless data and a separate New York Federal Reserve manufacturing report was weaker than expected.

The dollar was little changed in trading and stock futures pared gains.

The number of people who remained on the benefit rolls after drawing an initial week of aid increased 28,000 to 3.06 million in the week ended May 3, the latest period for which figures were available.

It was the third consecutive week that continued claims were above 3.0 million and also the highest since March 2004.

“Continued claims are solidly above 3 millions ... As we head further into May, we continued to see layoffs outpacing hires, which means more job losses. If we are lucky, we could see another 20,000 decline like in April,” Christopher Low, chief economist with FTN Financial in New York.

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