WASHINGTON (MarketWatch) — The number of Americans seeking new jobless benefits rose for the second week in a row as thousands of phone workers at Verizon Communications filed claims, government data showed.

New applications for U.S. unemployment compensation rose 5,000 to 417,000, the Labor Department said Thursday. Initial claims from two weeks ago were revised up to 412,000 from an original reading of 408,000.

Economists surveyed by MarketWatch had expected new requests for jobless benefits to total 410,000 in the week of Aug. 20 on a seasonally adjusted basis.

Although the claims data was boosted by the Verizon strike, applications for jobless benefits remain at an elevated level normally associated with subpar hiring trends. In a strong economy, claims usually fall far below 400,000 as companies rapidly add workers.

Workers rally outside Verizon headquarters in New York earlier in August. Reuters

“The jobs market remains mediocre as it has for some time and, in the absence of a rapid and unexpected surge in growth, likely will in the near-term,” said Jim Baird, chief investment strategist at Plante Moran Financial Advisors.

Verizon strike

The government said at least 8,500 workers at Verizon Communications VZ, +0.42% filed claims last week and at least 12,500 filed claims the week before. The numbers are not seasonally adjusted.

While state governments have to accept any application for jobless benefits, they are not obligated to approve all of them.

Workers are typically not eligible for compensation, for example, if they walk off the job. They can only receive benefits if the company prevents them from going to work as part of a contract dispute.

The one exception is New York. The state is the only one in the U.S. that allows striking workers to receive unemployment compensation, according to Candice Johnson, spokeswoman for the Communications Workers of America. About 16,000 of the 45,000 CWA workers who went on a two-week strike earlier in August live in New York, she said.

Meanwhile, the average of new claims over the past four weeks rose by 4,000 to 407,500. The monthly average is seen as a more accurate gauge of labor trends because it smooths out volatility in the week-to-week data.

In addition, the Labor Department said the number of Americans who continue to receive state unemployment checks fell by 80,000 to 3.64 million in the week ended Aug 13. Continuing claims are reported with a one-week lag.

Weekly jobless claims continue to hover above the 400,000 level as they have done for most of the year, reflecting little improvement in a weak U.S. labor market. The unemployment rate is stuck around 9%, or an even higher 16% when including people who are forced to work part-time or have stopped looking for a job.

The slow rate of hiring explains why the federal government is still paying extra benefits to millions of Americans. Some 3.64 million people received extended federal benefits in the week ended Aug. 6, down about 20,000 from the prior week. These people have already used up state benefits, which usually last six months.

A total of 7.29 million people received some kind of state or federal benefit in the week of Aug, down 45,989 from the prior week. Total claims are reported with a two-week lag.