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Jul 19, 8:45 AM EDT

US jobless claims surge, seasonal issues a factor

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WASHINGTON (AP) -- The number of Americans seeking unemployment benefits surged last week, although the figures may have been distorted by seasonal factors.

The Labor Department says applications rose by 34,000 to a seasonally adjusted 386,000. The increase reversed a big drop the previous week.

Economists view the recent numbers with skepticism. They note that the government struggles to adjust the data to reflect temporary summertime layoffs in the auto industry. And this year, many automakers are foregoing the typical shutdowns because stronger sales have kept plants busier. That has made the process even more difficult.

The less volatile four-week average fell by 1,500 to 375,500.

Economists say the seasonal distortions may last a few weeks, making the figures difficult to analyze.

When applications fall below 375,000, it typically suggests hiring is strong enough to pull the unemployment rate down. Applications had been trending near or above that level this spring.

The economy appears to be suffering its third straight midyear slump.

Federal Reserve Chairman Ben Bernanke this week offered a bleak assessment of the economy. And a survey from the Fed said hiring was "tepid" in most districts in June and early July, retail sales slowed in Boston, Cleveland and New York, and manufacturing weakened in most regions.

Job growth slowed to 75,000 a month from April through June, down from healthy 226,000 pace the first three months of the year. Unemployment has been stuck at 8.2 percent for two straight months.

Retail sales fell in June for the third straight month, prompting many economists to downgrade their estimates of economic growth in the April-June quarter. Many now think it will be even slower than the first quarter's sluggish 1.9 percent annual pace.

The only good news recently has been evidence of a long-awaited recovery in the housing market. The government reported Wednesday that U.S. builders last month broke ground on the most homes in nearly four years. Single-family home building rose for a fourth straight month. And permits to build single-family homes hit the highest level since March 2010.

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