initial jobless claims
A man holds his briefcase at a job fair in New York. The underlying trend in the labor market points to a strengthening labor market, new data show. Reuters

U.S. employment is improving, though not as quickly as analysts expected.

A Capital Economics analyst on the U.S. said Thursday that “labor market conditions are improving” even though jobless claims hit a six-month high in the week ending Oct. 5.

Jobless claims last week rose from 308,000 to 374,000, an unusually steep increase of 66,000 claims.

The increase stems largely from a backlog of claims linked to an IT upgrade in California and a wave of private sector temporary layoffs triggered by the federal government’s shutdown, according to the same analyst.

Lockheed Martin (NYSE: LMT), for example, receives many federal contracts and has temporarily laid off workers during the shutdown.

The four-week average for jobless claims is 325,000, an increase of 20,000 from the previous week’s average, but still below averages from a month or two ago. For the week ending Aug. 17, claims averaged 330,500.

The Labor Department releases the claims report from information collected by the states. The report does not include furloughed government employees because they file applications through a separate program. Federal workers can file for unemployment benefits while they are unemployed, but they will have to return the money if the government gives them back pay as expected.