WASHINGTON | Thu Apr 18, 2013 8:59am EDT
(Reuters) - The number of Americans filing new claims for unemployment benefits rose slightly last week, allaying fears of a major setback in the labor market recovery.
Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 352,000 the Labor Department said on Thursday. The prior week's number was revised to show 2,000 more applications than previously reported.
A Labor Department analyst said claims for California and Kentucky had been estimated.
Despite the increase last week, which was broadly in line with economists' expectations, claims held near a level economists normally associate with average monthly job gains of more than 150,000.
That helped to further ease concerns of a deterioration in labor market conditions after nonfarm payrolls posted their smallest increase in nine months in March.
"We had a lot of volatility since the end of the quarter. This is a fairly clean, stable number. There is some slight strengthening in labor conditions but nothing dramatic," said Stephen Stanley, chief economist at Pierpont Securities in Stamford, Connecticut.
The Federal Reserve's Beige Book of economic conditions released on Wednesday said employment conditions remained unchanged or improved somewhat.
U.S. stock index futures added to gains on the claims data. U.S. Treasury debt prices and the dollar were little changed.
The four-week moving average for new claims, a better measure of labor market trends, rose 2,750 to 361,250.
Last week's claims data covered the survey period for April nonfarm payrolls. Claims increased 11,000 between the March and April survey periods.
But given recent volatility because of the early Easter and spring breaks this year, claims are probably not useful in trying to gauge April payrolls.
Employers added 88,000 workers to their payrolls last month after a solid 268,000 increase in February.
While there is no doubt job growth has slowed in line with the overall economy, economists said March's meager gains overstated the labor market's weakness.
Recent data ranging from employment, retail sales and manufacturing suggest the economy is heading into a soft patch, blamed mostly on higher taxes and deep government spending cuts.
There is still no sign in the claims data that the effects $85 billion in government budget cuts known as the "sequester" have started to filter through to the labor market.
The cuts took hold on March 1.
The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 35,000 to 3.07 million in the week ended April 6.