WASHINGTON (June 8): The number of Americans filing new claims for unemployment benefits surged last week, suggesting that the labour market was slowing amid mounting risks of a recession.

Initial claims for state unemployment benefits jumped 28,000 to a seasonally adjusted 261,000 for the week ended June 3, the Labor Department said on Thursday (June 8). Economists polled by Reuters had forecast 235,000 claims for the latest week.

Despite the surge in applications, claims remain at levels consistent with a tight labour market. The government reported last week that the economy added 339,000 jobs in May. Although the unemployment rate increased to a seven-month high of 3.7% from 3.4% in April, it remains low by historical standards.

The jump in claims was a sign of more cracks forming in the labour market. The Institute for Supply Management (ISM) reported on Monday (June 5) that its services PMI dropped in May, attributed mostly to weakness in employment.

The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 37,000 to 1.757 million during the week ending May 27, the claims report showed.