New claims for unemployment aid in the US unexpectedly rose last week, heightening fears the economic recovery is stalling.
Initial claims for state unemployment benefits increased 13,000 to a seasonally adjusted 472,000, the Labor Department said today.
Analysts polled by Reuters had expected claims to slip to 452,000 from the previously reported 457,000, which was revised slightly up to 459,000 in today's report.
While layoffs have slowed sharply from early last year, businesses remain skeptical of the strength of the recovery and are holding back on hiring, keeping claims for unemployment benefits at uncomfortably lofty levels.
High unemployment is a sore point for president Barack Obama, whose approval ratings have plummeted.
The economy's failure to create sufficient employment to absorb the more than 8 million Americans who lost their jobs during the recession could hurt the Democratic Party in the November mid-term elections.
"It's looking more and more like the job market is treading water. Layoffs are down from 2009, but hiring hasn't really picked up and this is disappointing," said Stephen Bronars, a senior economist at Welch Consulting in Washingtion.
"There is a lot of uncertainty on the hiring side that's causing things to remain sluggish. In order for the recovery to give people confidence it needs to cut across different sectors of the economy."
US stock index futures extended losses on the data, while Treasury debt prices added to gains. The U.S. dollar fell versus the yen.
The claims data has no implications for the June employment report due tomorrow as it falls outside the survey period.
Nonfarm payrolls likely fell 110,000 last month, the first decline this year, as the bulk of May's 411,000 temporary census jobs ended, according to a Reuters survey. Employment increased 431,000 in May.
However, there is a risk payrolls could show a steeper decline after an independent report on Wednesday showed private employers added only 13,000 jobs last month.
Separately, the number of planned layoffs at US companies rose slightly last month, but the level remained close to a four-year low, global outplacement consultancy Challenger, Gray & Christmas said.
Employers announced 39,358 planned job cuts in June, up 1.4 per cent from 38,810 in May. Announced layoffs touched a four-year low in April at 38,326.