September 3, 2004 -- In an ominous sign before Friday's employment report for August, the number of workers filing first-time claims for unemployment benefits rose by 19,000 for the week ended August 28, according to the Labor Department.

The agency attributed a "little less than half" of the increase to job losses resulting from Hurricane Charley, which hit Florida on the weekend of August 13. Initial jobless claims totaled 362,000 for the week, pushing the four-week average, which smoothes out weekly fluctuations, up 6,250 to 343,000. Economists had forecast claims to fall by 3,000 during the week.

The poor reading sheds even more doubt on the health of the labor market ahead of Friday's payroll and unemployment rate report. A very disappointing 32,000 jobs were added in July and June saw payrolls rise only 78,000. Economists say that an increase of 150,000 jobs is needed to absorb new entrants into the workforce alone. Analysts are predicting that payrolls increased by 150,000 in August, but the unexpected rise in jobless claims might lower that number.

The economy hasn't been able to produce jobs at a consistent rate during 2004. Companies briefly added workers at a strong pace in March through May after output increased at an impressive 4.5 percent annual rate in the first quarter. But hiring slackened following a slowdown to a 2.8 percent pace in the second quarter.