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Initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 465,000, the Labor Department said on Thursday, breaking two straight weeks of declines. Analysts polled had forecast claims unchanged at 450,000. The prior week’s figure was revised up to 453,000. New U.S. claims for unemployment benefits rose unexpectedly last week, highlighting continued labor market weakness. 

A Labor Department official said only one state had been estimated for last week’s claims report and noted that applications for jobless benefits tend to rise in the week following a holiday. The four-week average of new jobless claims, considered a better measure of underlying labor market trends, fell 3,250 to 463,250, the lowest since July 31. The labor market has been showing modest signs of improvement after a setback in the second quarter as economic growth slowed sharply.

Relentlessly high unemployment is crimping consumer spending and the Federal Reserve on Tuesday signaled it would, if needed, inject more money into the economy to shore up the recovery and avert a damaging downward spiral in prices. The central bank already has cut overnight interest rates to near zero and pumped more than $1.7 trillion into the economy with purchases of Treasury and mortgage-related debt. Stimulating the lethargic economy is a major challenge for President Barack Obama, and a wave of voter anger over a 9.6 percent unemployment rate could cause the Democratic Party to lose control of Congress to Republicans in the Nov. 2 mid-term election.

The number of people still receiving benefits after an initial week of aid dropped 48,000 to 4.49 million in the week ended Sept. 11 from an upwardly revised 4.54 million the prior week. The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, dipped to 3.5 percent during that period from 3.6 percent the prior week. The number of people on emergency benefits increased 113,785 to 4.2 million in the week ended Sept. 4

Buffet

Warren Buffett, a financial leader and a bellwether of business, said we are still in a recession, but he also cautioned people against blaming the government. The chairman of Berkshire Hathaway sat down with CNBC’s Becky Quick to talk about the recession and the recovery.

“The government did the right thing in getting the economy going again,” Buffett said. In the second half of the interview, Buffett returned to the government’s role in the recovery. He suggested that the Federal Reserve, rather than paying banks a quarter of percent on the trillion dollars on deposit, should charge a quarter of percent to leave their money on deposit to encourage banks to make loans.

The government’s policies are not “kick-starting things as much as the American public would like,” Buffett said. However, “we will come back regardless of how people feel about Washington. … But it’s not helpful to have people as unhappy as they are about what’s going on in Washington.” Even though the National Bureau of Economic Research declared we were no longer in a recession, Buffett said: “We’re in a recession until real per capita GDP gets back to where it was before. … We’re still in a recession and we’re not gonna be out of it for a while. But we will get out of it.”