U.S. initial jobless claims hit 500,000

The number of Americans filing initial claims for jobless benefits increased by 12,000 last week, pushing the total number above the half-million mark.

It's the first time since November that initial claims have been above the 500,000 mark. It was also the fourth increase in five weeks and surprised analysts, who were expecting a modest drop.

The four-week average rose by 8,000 to 482,500, the highest since December. A Labour Department analyst says there were no special factors that distorted the numbers.

The total number of continuing claims dropped 13,000 to 4,478,000.

But adding up those on state-paid programs and those covered under special extended federal benefits, the total number jumped 192,000 to 9,925,000 — getting close to the psychologically important level of 10 million Americans received jobless benefits, BMO economist Jennifer Lee noted.

Initial jobless claims have declined steadily for the past year from a peak of 651,000 in March 2009 as employers reduced layoffs and began hiring. Economists were looking for the number to drop below 425,000 and stay there before assuming that the economy was actively creating new jobs.

But after flattening out earlier this year, claims have begun to grow again.