In this Wednesday, Jan. 16, 2013, photo, perspective job seekers talk with employers during a job fair in Cuyahoga Falls, Ohio. The number of Americans seeking unemployment aid jumped last week, though the increase mostly reflected difficulties the government has seasonally adjusting its numbers. Applications are still at levels signaling modest hiring. (AP Photo/Tony Dejak)
In this Wednesday, Jan. 16, 2013, photo, perspective job seekers talk with employers during a job fair in Cuyahoga Falls, Ohio. The number of Americans seeking unemployment aid jumped last week, though the increase mostly reflected difficulties the government has seasonally adjusting its numbers. Applications are still at levels signaling modest hiring. (AP Photo/Tony Dejak)
In this Tuesday, Jan. 15, 2012, photo, Norma Urbario, left, and America Rodriguez stand in line, holding their resumes, during the job fair that the Miami Marlins hosted at Marlins Park in Miami. The number of Americans seeking unemployment aid jumped last week, though the increase mostly reflected difficulties the government has seasonally adjusting its numbers. Applications are still at levels signaling modest hiring. (AP Photo/J Pat Carter)
WASHINGTON (AP) ? The number of Americans seeking unemployment aid rose sharply last week but remained at a level consistent with moderate hiring.
Weekly applications for unemployment benefits leapt 38,000 to a seasonally adjusted 368,000, the Labor Department said Thursday. The increase comes after applications plummeted in the previous two weeks to five-year lows. Applications fell by a combined 45,000 in the second and third weeks of January.
The volatility reflects the government's difficulty adjusting the data to account for layoffs after the holiday shopping season. Job cuts typically spike in the second week in January as retailers dismiss temporary employees hired for the winter holidays. Layoffs then fall in the second half of the month.
The department attempts to adjust for such fluctuations but the January figures can still be volatile. The four-week average, a less volatile measure, ticked up to 352,000, just above a four-year low.
Most economists weren't concerned by the increase.
"This just reverses some of the previous sharp falls without altering the gradual downward trend," said Paul Dales, an economist at Capital Economics.
On Friday, the government is scheduled to issue its January jobs report. Analysts forecast that it will show employers added 155,000 jobs, the same as in December. The unemployment rate is expected to remain at 7.8 percent for the third straight month.
That's consistent with the number of people seeking unemployment aid. Applications fluctuated between 360,000 and 390,000 for most of last year. At the same time, employers added an average of 153,000 jobs a month.
That's just been enough to slowly push down the unemployment rate, which fell 0.7 percentage points last year to 7.8 percent.
The number of people continuing to claim benefits also rose. More than 5.9 million people received benefits in the week ended Jan. 12, the latest data available. That's 250,000 more than the previous week.
Steady hiring is needed to resume economic growth. The government said Wednesday that the economy shrank at an annual rate of 0.1 percent in the October-December quarter, hurt by a sharp cut in defense spending, fewer exports and sluggish growth in company stockpiles.
The contraction points to what is likely to be the biggest headwind for the economy this year: sharp government spending cuts and ongoing budget fights.
The economy will likely expand in the current quarter and is forecast to grow around 2 percent this year as strength in areas like housing and auto sales could partly offset government cutbacks. But looming, across-the-board spending cuts, set to take effect March 1, would weaken a still-precarious recovery.
Two key drivers of growth improved last quarter. Consumer spending, which accounts for 70 percent of economic activity, increased at a faster pace and businesses invested more in equipment and software.
Homebuilders, meanwhile, are stepping up construction to meet rising demand. That could create more construction jobs.
Home prices are rising steadily. That tends to make Americans feel wealthier and more likely to spend. Housing could add as much as 1 percentage point to economic growth this year, some economists estimate.
And auto sales reached their highest level in five years in 2012. That's boosting production and hiring at U.S. automakers and their suppliers.
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