By SARA MURRAY, Wall Street Journal
New claims for jobless benefits soared last week, a worrisome sign for the slowly recovering labor market.
Separately, an index of leading economic indicators fell in April, pulled down by a sharp decline in building permits.
The number of workers who filed new claims for unemployment insurance climbed by 25,000 to a seasonally adjusted 471,000 for the week ended May 15, the Labor Department said Thursday.
"We are left with the uncomfortable possibility that the trend in claims has not only stopped falling, but may be turning higher," Ian Shepherdson, a High Frequency Economics Ltd. economist, said in a note to clients.
A Labor Department economist said Thursday that, unlike early April, when jobless claims surged due to seasonal and holiday factors, this time there was no indication any special factors were at work.
Last week's jump in claims reversed most of the declines since April 10, when claims were at 480,000.
Economists were quick to point out that last week's decline didn't necessarily indicate a trend and that the government's payroll data has shown the labor market was improving, with the economy adding jobs for the past four months.
"The recovery, both in the labor market and more generally, was never going to happen in a straight line, and temporary setbacks are not uncommon," said Omair Sharif, an RBS Securities Inc. analyst. "So we would brush this figure off unless we see further confirmation of a sustained pickup in layoffs."
The four-week moving average for jobless claims, which aims to smooth volatility in the data, also rose. Those claims increased by 3,000 to 453,500.
Continuing claims, those drawn by workers for more than one week, fell by 40,000 to 4.6 million for the week ended May 8.
Leading Indicators Retreat
In another report, an index of leading economic indicators fell 0.1% in April after rising 1.3% in March, the Conference Board said Thursday. The index is designed to predict where the economy is headed.
"These latest results suggest a recovery that will continue through the summer, although it could lose a little steam," said Conference Board economist Ken Goldstein.
Readings for building permits and jobless claims declined, while measures for the average workweek, stock prices and the interest-rate spread ticked up.
The coincident economic index, which measures the current state of the economy, increased 0.3% in April. An index of lagging economic indicators rose 0.1%.
—Sarah N. Lynch contributed to this article.