Layoffs rise amid jump in consumer spending, incomes

First-time claims for unemployment benefits jumped unexpectedly last week to their highest level in about two months, a figure that comes amid a batch of mostly positive economic news.

Jobless claims rose to a seasonally adjusted 344,000, an increase of 14,000 from the previous week and the highest number of people since late February, the Labor Department said Thursday.

The four-week average, a better indicator of the health of the labor market, increased 3,000 to 320,000, a figure that is still reflects an improving hiring picture.

Another Thursday report showed that planned job cut announcements were up 17 percent in April, as employers in retail and financial services continued to shed workers.

Employers announced plans to shed 40,298 workers from their payrolls in April, up from 34,399 in March, according to Challenger, Gray & Christmas, a firm that track employment trends.  

But the good news is that, so far this year, employers have announced 161,639 job cuts, 12 percent fewer than the 183,162 planned layoffs in the first four months of 2013.

Otherwise, the labor market recovery seems to be picking up pace with a private-sector report on Wednesday showing that businesses added 220,000 jobs in April. 

The government is set to release its monthly data on private and public jobs growth on Friday with estimates within the range of 210,000 to 230,000.

Meanwhile, a separate report showed that consumers picked up spending more than expected in March and at the fastest pace in almost five years, a positive sign for an ailing economy trying to break out of the winter doldrums.

Consumer spending, which accounts for nearly 70 percent of economic activity, climbed 0.9 percent in March, the largest monthly gain since August 2009.

Spending figures for February were revised up to 0.5 percent from 0.3 percent, the Commerce Department said. 

Another pick up in hiring could provide consumers with the confidence they need to continue the upward trend in spending heading into the warmer months.

Bolstering the increase in spending was a pick up in incomes, which rose 0.5 percent in March after rising 0.4 percent in February.

But another Wednesday report showed that the economy expanded at an anemic 0.1 percent in the first three months of the year, much slower than the 1 percent that was forecast.

Severe winter weather was deemed the culprit, and economists expect a faster expansion through the rest of the year as the housing and hiring pick up.