Unemployment claims up sharply

NEW YORK (CNN Money) - A recent drop in unemployment claims was just too good to be true. Claims rose sharply last week after falling to a four-year low earlier in July.

About 386,000 people filed initial jobless claims in the week ended July 14, up 34,000 from the previous week, the Bureau of Labor Statistics said Thursday.

The unemployment claims figure is considered an important gauge of the job market because it's correlated with layoffs, but the data has been choppy recently for several reasons.

Every year, automakers shut down to reconfigure their machinery to make next year's models -- a phenomenon that typically happens in early July and results in temporary layoffs. The Labor Department tries to adjust for this factor but may have overcompensated this year.

Stronger auto sales have led factories to either shorten or cancel shutdowns and make fewer of those furloughs.

As a result, the initial claims figures looked artificially low in early July, and may now be heading back toward a more normal path.

Meanwhile, 3.3 million people filed for their second week of unemployment benefits or more in the week ended July 7, the most recent data available. That number was barely changed from the week before


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