Claims for unemployment benefits increased by 28,000 last week to reach the highest level in eight months – which was largely unexpected by economists.

The U.S. Labor Department said yesterday that applications for benefits hit 337,000 last week, an increase of 28,000 from the week before.

That’s the biggest one-week increase since claims jumped 42,000 the week of Feb. 10.

Economists had predicted a mere 6,000 layoffs for the week. The difference could mean the labor market is starting to weaken under the impact of the August housing and credit crisis.

The four-week average for claims edged up to 316,500, the highest level in four weeks.

For the week ending Oct. 6, 45 states and territories saw claims increase while eight reported declines. The biggest increases occurred in California, up by 6,317, and Georgia, up by 3,255.

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