A bit of sour news Thursday -- in the form of increased jobless benefit claims and higher wholesale prices -- suggested the economy was moving in fits and starts even as the recession eases.

Analysts said the pace of unemployment claims should ease after auto industry layoffs are completed. Inflation, meanwhile, remains under control, and any threat of a dangerous bout of falling prices seems remote.

The number of new jobless claims last week rose to a seasonally adjusted 637,000, from a revised 605,000 the previous week, the Labor Department said. That exceeded analysts’ expectations of 610,000.

Economists noted that initial claims remained below a peak reached in late March -- a sign that the wave of mass layoffs announced earlier this year probably has crested.


“This is yet more evidence that we are now past the worst,” Paul Dales, U.S. economist at Capital Economics, wrote in a research note.

Separately, the department said wholesale prices climbed 0.3% last month, larger than the 0.1% gain economists had expected. The biggest jump in food costs in more than a year offset a second monthly decline in the price of energy products.

A 43.7% jump in egg prices helped drive food costs higher. The increase, the largest on records dating to 1992, was partly a one-time blip, because Easter occurred in April, Labor Department economist Scott Sager said. The same dynamic drove pork prices up 2.5%.

The overall 1.5% increase in food costs also represents a leveling off after food prices fell in four of the previous five months, economists said.


Even with the larger-than-expected gain in the producer price index, wholesale prices over the last year have dropped 3.7%. That’s the biggest 12-month decline since 1950.