Jobless claims climb to 417,000

Jobless claims unexpectedly rose for the week ending Aug. 20, climbing by 5,000, to 417,000.

Economists surveyed by Dow Jones estimated claims for unemployment benefits, which previously stood at 412,000, would fall to 405,000.

The four-week moving average, which is aimed at smoothing out week-to-week volatility and painting a more accurate picture of the job market, was 407,500, an increase of 4,000 from the previous week's level.

However, the Labor Department believes the recent spike in the claims has been exacerbated by a labor dispute at Verizon Communciations.

A strike by workers there added at least 8,5000 new claims last week, and was good for another 12,5000 claims for the week before that, according to department economists.

Nonetheless, the data continues to paint a picture of an economic recovery losing steam. Financial markets have been extremely volatile throughout the month of August, as investors worry that the economy could be headed for a double-dip recession.

The recent increase keeps jobless claims above the crucial 400,000 mark. When claims fall below that point, economists believe the economy is adding more jobs than it is losing.

Given the market turmoil, all eyes will be on Jackson Hole, Wyo., on Friday, as Federal Reserve Chairman Ben Bernanke is slated to give a speech on the economy. Many in the markets are wondering if he will use that opportunity to announce further stimulative efforts from the central bank, as he did last year when the Fed embarked on a second round of quantitative easing.

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