The number of Americans filing new claims for unemployment benefits rose more than expected last week, but not enough to signal a material shift from the recent pace of moderate job growth. A separate report showed that U.S. manufacturing activity growth slowed slightly in June.
Initial claims for state unemployment benefits increased 18,000 to a seasonally adjusted 354,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 2,000 more applications received than previously reported.
Economists polled by Reuters had expected first-time applications to rise to 340,000 last week.
The four-week moving average for new claims, which irons out week-to-week volatility, rose 2,500 to 348,250.
A Labor Department analyst said no states had been estimated and there was nothing unusual in the state-level data.
Despite the increase last week, claims remained in the middle of their range for this year.
Last week's data covered the period in which the government surveyed companies for June's nonfarm payrolls count. Claims increased 10,000 between the May and June survey periods, suggesting little change in the pace of job creation.
Employers added 175,000 new jobs to their payrolls last month, with the unemployment rate ticking up a tenth of a percentage point to 7.6 percent. Job gains have averaged 172,000 per month over the last 12 months.
The Federal Reserve, which has been closely monitoring the labor market, said on Wednesday downside risks to the outlook for the jobs market had diminished since the fall and painted a fairly upbeat picture of the economy.
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Fed Chairman Ben Bernanke said the U.S. central bank expected to slow the pace of its bond purchases later this year and bring them to a halt around the middle of 2014. The Fed is buying $85 billion in bonds per month in an effort to keep interest rates low and drive down still-high unemployment.
The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 40,000 to 2.95 million in the week ended June 8.
US Factories Struggle
A separate survey showed that U.S. manufacturing activity growth slowed slightly in June as the pace of hiring and overseas demand weakened, making the second quarter the weakest for the sector in the last four.
Financial data firm Markit said its "flash," or preliminary, U.S. Purchasing Managers' Index fell to 52.2 in June from 52.3. A reading above 50 indicates expansion.
June's 52.2 reading was also the average for the second quarter, behind the 54.9 average in the first three months of the year and the worst showing since the third quarter of 2012.
"Slower growth in the goods-producing sector looks likely to have acted as a drag on the wider economy," said Markit chief economist Chris Williamson. The U.S. economy grew at a 2.4 percent rate between January and March.
Markit's output index rose to 53.9, a three-month high, from 52.7 in May while the gauge of new orders also rose to its highest level since March, offering some hope. But the pace of hiring slowed to 50.4 from 52.6, reflecting the weakest rate of job creation since January 2010.
"Companies are certainly circumspect about any sustained revival of demand," said Williamson, who added that employment was also being suppressed by "the need to boost productivity, especially with intensifying competition from overseas and in export markets."
New export orders contracted for a second straight month, with overall demand from customers abroad at its weakest since October 2012.
The "flash" reading is based on replies from about 85 percent of the U.S. manufacturers surveyed. Markit's final reading will be released on the first business day of the following month.