The four-week average stood at 424,750, a gain of 3,500. For just the week ended April 12, jobless claims rose 30,000 to 442,000, erasing nearly all of the decline from the previous week.
A Labor official said auto industry layoffs contributed to the latest results. The number of Americans who remained on benefits rolls for the week ending April 5 rose 76,000 to 3.574 million. The seasonally adjusted four-week average of continuous claims rose 9,750 to 3.525 million, the highest since the week ended Nov. 23.
For nine straight weeks, claims have been above the 400,000 mark, a level associated with a stagnant job market. Thursday's figures were weaker than economists were expecting.
Businesses have been struggling with lackluster profits and uneven demand from customers. Against that backdrop, companies have been reluctant to increase capital spending and go on a hiring spree, major forces restraining the economy's recovery.
Economists believe the nation's unemployment rate — now at 5.8 percent — is likely to rise in the months ahead.
Federal Reserve Chairman Alan Greenspan and his colleagues are hopeful that once the war in Iraq is over, the economy will return to good health.
But even if the economy starts improving a bit later this year, the jobless rate probably will creep up because job growth won't be strong enough to accommodate the expectation that an improved climate will attract a lot more job seekers.
Economists don't expect companies to step up hiring or capital investment until they feel secure about the economy, their profits and customer demand.
After sliding into recession in 2001, the economy has been struggling to get back on firm footing. The economy's growth, however, has been characterized by a jagged pattern, where a quarter of strength is followed by a quarter of weakness.
The Federal Reserve decided in March to hold the federal funds rate at 1.25 percent, a 41-year low, with the hope that will spur more spending and investment and help along the economy. The funds rate is the Fed's main lever to influence economic activity.
President Bush, recognizing congressional skepticism over the size of his original economic stimulus proposal for a $726 billion tax cut, is now calling for $550 billion worth of reductions over 10 years.