Meanwhile, the number of people receiving unemployment insurance dropped by 34,000 to 4.54 million in the week ended July 24, while those receiving extended benefits — up to 99 weeks in some states — increased by about 258,000 to 3.92 million in the week that ended July 17.
On July, 22, President Obama signed a bill providing benefits retroactively to the more than 2.5 million Americans who have lost their benefits since early June after the measure languished in the Senate for six weeks.
The government revised the prior week’s total to 460,000 from a previously reported 457,000.
Despite improving balance sheets and more investment into equipment by businesses, employers area still being cautious about hiring.
During the past few weeks, claims had hit their lowest level since September 2008 as factories remained open during the summer months. But those factors aren't affecting the data any longer, according to the Labor Department.
The four-week moving average, which smoothes out the volatility of the weekly number and provides a better gauge of the employment situation, increased to 458,500 from 453,250 last week.
Unemployment numbers have hovered around 450,000 for the past several months, showing no real downward movement, which is needed to push along the recovery.
Economists argue that jobless claims need to drop into the low 400,000s or high 300,000s to reflect stronger job growth in the private sector.
Earlier this week, Federal Reserve Chairman Ben Bernanke said as incomes increase consumers will start spending more in the next few quarters.
While the U.S. has “a considerable way to go” for a full recovery, “rising demand from households and businesses should help sustain growth,” Bernanke said in a speech in Charleston, S.C. “The slow recovery in the labor market and the attendant uncertainty about job prospects are weighing on household confidence and spending.”