New claims for US unemployment benefits jumped last week, in line with market expectations, as employers shed payrolls to cope with the severe recession.
The US Labor Department said that first-time claims for unemployment insurance benefits rose to a seasonally adjusted 554,000 in the week ended July 18, after a revised 524,000 in the preceding week.
The average consensus forecast was for 557,000 initial claims.
'It's the third or fourth week of a lot of volatility in our series,' a department statistician said.
Over the preceding three weeks, initial jobless claims had fallen by a cumulative total of 106,000.
The department explained that the seasonally adjusted data was skewed because industrial lay-offs that usually occur in early July happened earlier this year with the bankruptcies of auto giants General Motors and Chrysler.
On a four-week moving average, a more reliable indicator of the jobs market, the number of new claims filed fell to 566,000 from the previous week's revised 585,000.
With the unemployment rate at 9.5%, a 26-year high and expected to go higher, President Barack Obama's administration is under pressure to do more to stimulate the ailing economy which slid into recession in December 2007.
Critics say the $787 billion stimulus passed in February is making its way too slowly through the economy and has not done enough to stave off rising job losses.
Mr Obama says the unemployment rate could hit the double digits this year as the economy grapples with the recession.
