The Labor Department reported today that initial claims for unemployment benefits rose last week by 16,000 to 404,000. This marks the second time in 2008 that initial jobless claims have crested the 400,000 mark; the last time was in late March, when claims totaled 406,000. The jump was unexpected by most, as economists surveyed by Thomson Reuters IFR Markets were expecting weekly claims to drop to 385,000.

The 4-week moving average of new jobless claims which smoothes out irregularities in weekly data, such as those caused by holidays increased by 10,250 to 390,500, tapping its highest point since October 2005.

Continuing claims for unemployment dropped by 19,000 to 3.12 million, coming in lower than the consensus estimate for 3.15 million. The 4-week moving average for continuing claims surged, however, rising by 8,750 to 3.11 million. It's the highest level for this indicator since February 2004. The insured unemployment rate pulled back to 2.3% from 2.4%.

In other employment news hitting the Street today, the Labor Department said earlier that nonfarm payrolls fell by 62,000 in June.