First-time claims for unemployment benefits rose sharply last week, most likely because of volatile year-end seasonal factors.
Applications increased 68,000 to a seasonally adjusted 368,000, mostly due to seasonal adjustments to the data because of the Thanksgiving holiday, the Labor Department reported on Thursday.
The four-week moving average, which better reflects the direction of the labor market, increased 6,000 to 328,750, generally a positive sign for job gains.
The claims figure reflects the pace of layoffs, and while there has been gradual improvement over the past year, applications have fluctuated this fall because some states were catching up on backlogs.
For the past few months, the labor market has shown steady improvement with employers adding 203,000 jobs in November, while the unemployment rate dropped to 7 percent, a five-year low and a good sign for the health of the broader economy.
Even though the unemployment rate remains high, businesses say they are more optimistic heading into next year.
Congress getting a budget plan into place could help the economy and provide greater certainty on fiscal issues, freeing up business to invest and hire more.
But House Democrats aren't sure whether they will lend their support to a House-Senate budget compromise because Republicans have pushed back on considering a reauthorization of federal unemployment benefits for those who have been out of work for at least six months.
Without action, about 1.3 million will lose those benefits on Dec. 28.
Democrats say that they will continue to push for passage of bill before the House leaves on Friday.