The range of forecasts varies from 350k to 414k, much higher than the usual expectations.

Scotiabank economist Karen Cordes said the jobless claims report could garner some extra attention after Fed Chairman Ben Bernanke's testimony on Tuesday and Wednesday, as he appeared to put new emphasis on growth and labour conditions.

Prior to last week's dip, claims had been above 380k for four consecutive weeks. A consistent weekly claims level above 400k is commonly considered to be recessionary.

Christopher Rupkey, chief financial economist from the Bank of Tokyo-Mitsubishi UFJ, said the auto plant shutdowns hit the seasonal factors hard in the weeks ending July 5 and 12, and a reading free of distortion won't be released until next Thursday.

Continuing claims have been on a steady rise in recent months, hitting the tenth week in a row above the three million mark in the last report at 3.202 million. The consensus expect that figure to fall back to 3.180 million in the week ending July 5, a number still above the four-week moving average of 3.126 million.

The rise in continuing claims suggests the labour market is weakening on both fronts, as people who have lost their jobs are finding it difficult to find new employment.

After last week's report, RDQ economists called early July "a notoriously difficult time to extract the signal from the noise of the weekly volatility in claims."

By Patrick McGee, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it

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