Initial claims for state unemployment benefits increased 28,000 to a seasonally adjusted 385,000, the highest level since November, the Labor Department said on Thursday. It cautioned that the estimate was imprecise because the week included Easter.
Economists, who had expected claims to drop to 350,000, said while the rise partly reflected difficulties adjusting the data during the Easter and spring breaks, there was no doubt the pace of job growth had eased.
On Friday, the government releases its employment report for March. According to a Reuters survey of economists, employers added 200,000 jobs to their payrolls last month after hiring 236,000 workers in February. The unemployment rate is seen holding steady at 7.7 percent.
But a weaker reading is possible after a report from the payroll processor ADP showed that private employers added the fewest jobs in five months in March.
Goldman Sachs expects the economy to have created 175,000 jobs last month, noting that the tone of labor market indicators softened in March, especially in light of the so-called government sequester, which is cutting $85 billion in spending.
“The sequester is likely to slow March payroll growth, and payrolls have outpaced broader measures of labor market improvement over the last few months,” said Sven Jari Stehn, an economist at Goldman Sachs.