The number of Americans filing new claims for unemployment benefits last week rose to its highest level since May, which could raise concerns about some weakness in the labor market.
Other data on Thursday showed nonfarm productivity contracted more sharply than previously thought in the fourth quarter as output failed to keep up with a jump in hours.
Initial claims for state unemployment benefits increased by 7,000 to a seasonally adjusted 320,000 for the week ended Feb. 28, the highest reading since mid-May, the Labor Department said on Thursday.
The Labor Department said there were no special factors influencing the report.
"We suspect the pattern reflects the weather rather than fundamental deterioration. That said, we will, of course, be on watch for the possibility that the rise in the last two weeks marks a change in the trend," said Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York.
Claims have been choppy in recent weeks because of public holidays and a very snowy and cold February. Through the volatility, however, the underlying trend had remained consistent with a strengthening labor market.
Economists polled by Reuters had expected claims to fall to 295,000 last week.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 10,250 to 304,750 last week.
It was the third time this year that the four-week average has breached the 300,000 threshold, which is usually associated with a strengthening labor market.
The claims data has no bearing on Friday’s employment report for February as it falls outside the survey period.
Nonfarm payrolls are expected to have increased 240,000 last month after rising 257,000 in January, according to a Reuters survey of economists. The unemployment rate is forecast falling one-tenth of a percentage point to 5.6 percent.
The economy added more than a million jobs between November and January, a feat last seen in 1997. A key measure of labor market slack – the number of job seekers for every open position – hit its lowest level since 2007 in December.
Thursday’s claims report showed the number of people still receiving benefits after an initial week of aid increased 17,000 to 2.42 million in the week ended Feb. 21.
In a second report, the department said productivity fell at a 2.2 percent annual rate in the fourth quarter, instead of the 1.8 percent pace it had reported last month.
Economists polled by Reuters had expected that productivity, which measures hourly output per worker, would be revised down to show it declining at a 2.3 percent rate in the fourth quarter.
Productivity has been weak for much of the recovery from the 2007-09 recession. Weak productivity has helped to boost hiring.
Economists expect it to pick up once the slack in the labor market is squeezed out. If the slow productivity trend were to persist when the labor market was back at full employment, that could raise concerns about growth, they said.
Productivity increased 0.7 percent for all of 2014, revised down from the 0.8 percent gain reported last month. In the fourth quarter, hours worked increased at a revised 4.9 percent rate instead of the previously reported 5.1 percent pace.
Compensation per hour rose at a 1.9 percent rate, rather than the 0.9 percent pace reported last month.
That left unit labor costs, a key gauge of inflation and profit pressures that measures the price of labor for any given unit of output, increasing at a 4.1 percent rate in the fourth quarter. That was revised up from the 2.7 percent rate reported last month.