Source: Bloomberg.com

The number of Americans filing first- time claims for unemployment benefits unexpectedly rose last week to the highest level in six years, signaling the labor market continues to weaken.

Initial jobless claims increased by 7,000 to 455,000 in the week ended Aug. 2, the most since March 2002, from 448,000 the prior week. The number of continuing claims increased to a four- year high.

Companies are reducing staff as demand slows and raw- material costs surge. Rising unemployment adds to concerns that consumer spending will falter in coming months after the effects of the government’s tax rebate checks wane.

“The labor market is slackening,” said Michael Gregory, a senior economist at BMO Capital Markets in Toronto. “The underlying trend for jobs has got recession written all over it.”
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