The number of people applying for unemployment benefits surged last week to the highest level in eight months, a troubling sign one day ahead of the government's report on April employment.

The Labor Department says applications rose last week by 43,000 to a seasonally adjusted 474,000.  It was the third increase in four weeks. Applications have jumped 89,000, or 23 percent, in the past month. The four-week average, a less volatile measure, rose for the fourth straight week to 431,250.

The increase is caused by layoffs throughout the economy.  The New York School System laid off 25,000 people.  Layoffs in the auto industry are up because some companies have shut down or slowed production because of parts shortages stemming from the earthquake in Japan.

The state of Oregon launched its own extended unemployment benefit program, which caused an increase in overall applications for unemployment benefits.

Separately, the Labor Department said U.S. companies squeezed more work out of their staffs in the first three months of the year. But the overall gain in productivity was much slower than in the previous three months.

via Unemployment applications hit 8-month high | Top AP Stories | Chron.com - Houston Chronicle.

The government is scheduled to release its April jobs report on Friday.