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Steady as It Goes for Jobless Claims Picture

Job seeker Clinton Crouch, who said he was laid-off in Sept. 2011, fills out an application for a maintenance job during a job fair at Illinois Valley Community College (IVCC) in Oglesby, Illinois, U.S.
Daniel Acker | Bloomberg | Getty Images
Job seeker Clinton Crouch, who said he was laid-off in Sept. 2011, fills out an application for a maintenance job during a job fair at Illinois Valley Community College (IVCC) in Oglesby, Illinois, U.S.

The number of people filing new claims for unemployment benefits rose slightly last week, allaying fears of a major setback in the labor market recovery.

Initial claims for state unemployment benefits increased 4,000 to a seasonally adjusted 352,000, the Labor Department said Thursday. The prior week's number was revised to show 2,000 more applications than previously reported.

A Labor Department analyst said claims for California and Kentucky had been estimated.

Despite the increase last week, which was broadly in line with economists' expectations, claims held near a level economists normally associate with average monthly job gains of more than 150,000.

That helped to further ease concerns of a deterioration in labor market conditions after nonfarm payrolls posted their smallest increase in nine months in March.

(Read More: Forever Fed: Jobs Blues Sets Up Eternal Easing)

"We had a lot of volatility since the end of the quarter," said Stephen Stanley, chief economist at Pierpont Securities in Stamford, Conn. "This is a fairly clean, stable number. There is some slight strengthening in labor conditions but nothing dramatic,"

The Federal Reserve's Beige Book of economic conditions released Wednesday said the employment environment remained unchanged or had improved somewhat.

The four-week moving average for new claims, a better measure of labor market trends, rose 2,750 to 361,250.

Last week's claims data covered the survey period for April nonfarm payrolls. Claims increased 11,000 between the March and April periods. But given recent volatility because of the early Easter and spring breaks this year, claims are probably not useful in gauging April payrolls.

Employers added 88,000 workers to their payrolls last month after a solid 268,000 increase in February.

(Read More: US Job Creation Plunges, but Rate Drops to 7.6%)

While there is no doubt that job growth has slowed in line with the overall economy, economists said March's meager gains overstated the labor market's weakness.

Recent data ranging from employment, retail sales and manufacturing suggest the economy is heading into a soft patch, blamed mostly on higher taxes and deep government spending cuts.

There is still no sign in the claims data that the effects of $85 billion in government budget cuts, known as the "sequester" have started to filter through to the labor market. The cuts took effect March 1.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 35,000 to 3.07 million in the week ended April 6.

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