WASHINGTON (Reuters) - New U.S. claims for unemployment benefits rose more than expected last week, but a drop in the four-week moving average to a fresh two-year low continued to point to an improvement in the labor market.
Initial claims for state unemployment benefits increased 26,000 to a seasonally adjusted 436,000, the Labor Department said on Thursday. Economists had forecast claims rising to 425,000. The data has little bearing on Friday's employment report for November as it falls outside the survey period.
"It is largely on seasonal factors thanks to the Thanksgiving holiday. Underlying the trend is still declining so this doesn't offset any positive views about the labor market," said Sean Incremona an economist at 4Cast in New York.
U.S. stock index futures trimmed gains after the report, while prices for Treasury debt pared losses.
Anecdotal evidence points to a strengthening in the labor market and the government is expected to report that nonfarm payrolls rose 140,000 last month after increasing 151,000 in October.
Last week's claims covered the Thanksgiving holiday and filings tend to fall during that period. However, the decline in actual claims was not as large as the Labor Department's model had anticipated, leading to a rise in the adjusted claims figure, a department official said.
The four-week average of new jobless claims, considered a better measure of underlying labor market trends, fell 5,750 to 431,000, the lowest since early August 2008.
Data continued to suggest a pick-up in economic activity in the fourth quarter after a lull in the summer.
Several U.S. retailers on Thursday reported higher-than-expected sales for November, confirming a strong start to a holiday shopping season that could determine whether the U.S. economic recovery has legs.
Despite the spike in initial claims last week, they remained firmly within ranges economists regard as signaling solid jobs growth.
The number of people still receiving benefits under regular state programs after an initial week of aid rose 53,000 to 4.27 million in the week ended November 20, above expectations for 4.21 million. The number of people on emergency unemployment benefits increased 142,874 to 3.94 million in the week ended November 13, the latest week for which data is available.
A total of 8.91 million people were claiming unemployment benefits during that period under all programs.
About 2 million unemployed people will lose their benefits by the end of this month after Congress failed on Tuesday to renew them.
JPMorgan economist Michael Feroli estimates the loss of benefits could cut household income by 0.2 percent in December with a similar or slightly smaller drag on personal spending.
"The effect on January income and spending would be somewhat larger, in the event that the delay in reinstating benefits lasts that long," said Feroli.
(Reporting by Lucia Mutikani; Additional reporting by Karen Brettell and Martine Geller in New York; Editing by Andrea Ricci)
