People attend a jobs fair in Green Tree, Pa.
(Photo: Keith Srakocic, AP)
WASHINGTON -- The number of Americans seeking unemployment aid rose to a four-month high last week, although the increase partly reflects seasonal distortions around the spring holidays.
The number was higher than expected and though there is volatility in the figure at this time of year it follows other reports this week that the labor market may be starting to weaken.
The Labor Department says weekly applications increased 28,000 to a seasonally adjusted 385,000. That is the highest level since late November. The four-week average, a less volatile measure, rose to 354,250.
A Labor Department spokesman says it can be difficult to seasonally adjust the figures during the Easter holiday because the timing of the holiday varies from year to year. Economists warned before the report that the data could be volatile.
Applications are a proxy for layoffs. The recent increases could suggest that companies are cutting jobs, possibly because of steep government spending cuts that began on March 1. Other reports have pointed to that possible trend, although most economists have said that any reductions are likely temporary.
The government will issue the March employment report Friday. The unemployment rate in February was 7.7%.
Job growth has picked up in recent months. Employers added an average of 200,000 jobs per month from November through February. That's nearly double the average from last spring.
Stronger economic growth this year has spurred more hiring. A steady housing recovery has boosted home construction and prices. Higher home prices make Americans feel wealthier, which can spur more spending.
In February, consumer spending rose by the most in five months. And consumer confidence improved in March from the previous month, according to a survey released last week by the University of Michigan.
Two reports Wednesday, however, suggested companies may have grown more cautious last month. Services companies grew in March but at a slower pace than in February, according to the Institute for Supply Management, a trade group. Service firms, which include retailers, hotels, restaurants and financial companies, cut back on hiring and a measure of new orders fell.
And private employers added fewer jobs in March compared with February, according to payroll processor ADP. Construction firms didn't add any positions after three months of strong gains.
Several economists lowered their forecasts for hiring in March after Wednesday's reports. Still, many analysts cautioned that the ADP is not always an accurate predictor of the government's more comprehensive figures.
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