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The number of Americans seeking jobless aid rises unexpectedly to highest level in 2 months

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WASHINGTON - The number of Americans applying for unemployment benefits rose last week to the highest level since February, a dose of mixed news for an economy that is supposed to be gaining momentum.

The Labor Department says a seasonally adjusted 344,000 people applied for jobless aid, up 14,000 from the previous week and the most since late February. Economists had expected a drop.

The less-volatile 4-week average rose by 3,000 to 320,000. The number of people applying for jobless aid has now risen three straight weeks.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said last week's numbers might have been warped by the Easter holiday. "We think the underlying trend is falling, but only slowly," he wrote in a research note.

Unemployment benefits are a proxy for layoffs and have fallen to pre-recession levels since peaking at 665,000 in March 2009.

Another Labor Department report shows that layoffs are running nearly 40 per cent below their peak in 2009. Though they've stopped cutting jobs, employers have been slower to add new ones: Hiring remains well below pre-recession levels. Still, the United States economy generated a solid 192,000 jobs in March on top of 197,000 in February. The government releases job figures for April on Friday. Economists are forecasting that the economy generated 210,000 jobs last month.

The government reported Wednesday that the economy grew at an annual pace of just 0.1 per cent from January through March. Economists blamed bad weather for the slowdown, which was worse than expected. Most expect growth to pick up as the year wears on and to reach an annual rate of more than 3 per cent from July through December.

The Federal Reserve was confident enough in the economy's strength to announce Wednesday that it would continue scale back a bond-purchasing program meant to keep long-term interest rates low and encourage more borrowing and spending.

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