Jobless claims jump to three-month high

Claims for unemployment benefits jumped unexpectedly to a three-month high, the latest hint that job growth in the United States is not proceeding as planned.

As the boost from government stimulus faded, the private sector was supposed to pick up steam and employ new workers. Instead, businesses are hiring at such a disappointingly sluggish pace that the unemployment rate is likely to remain high for some time to come.

Friday's unemployment report for July will offer the clearest picture of the labor market. So far, the evidence isn't encouraging:

•The number of workers filing claims for first-time unemployment benefits jumped to 479,000, up an unexpected 19,000 from the previous week and the highest overall level since April, the Department of Labor reported Thursday. That suggests an ongoing elevated level of layoffs.

•The private sector only added 42,000 jobs in July, barely above the average gain for the past six months and with no sign of an acceleration, according to the ADP employment report (.pdf) released Wednesday.

The positive news is that the economy is still expanding. The challenge is that anemic job growth will make it hard to absorb the number of new workers entering the labor force, much less hire back those who have spent so much time unemployed, economists say.