The number of Americans filing new applications for jobless benefits unexpectedly rose last week and more people continued to collect unemployment checks at the end of November relative to the beginning of the year as demand for labor cools.

Initial claims for state unemployment benefits increased 17,000 to a seasonally adjusted 242,000 for the week ended Dec. 7, the Labor Department said on Thursday. Economists polled by Reuters had forecast 220,000 claims for the latest week.

Last's week jump in claims likely reflected volatility after the Thanksgiving holiday and likely does not mark an abrupt shift in labor market conditions.

Claims are likely to remain volatile in the weeks ahead, which could make it difficult to get a clear read of the labor market. Through the volatility, the labor market is slowing.

Though job growth accelerated in November after being severely constrained by strikes and hurricanes in October, the unemployment rate ticked up to 4.2% after holding at 4.1% for two consecutive months.

An easing labor market makes it more likely that the Federal Reserve will cut interest rates next week for the third time since it embarked on its policy easing cycle in September, despite little progress in lowering inflation down to its 2% target in recent months.

The U.S. central bank's benchmark overnight interest rate is now in the 4.50%-4.75% range, having been hiked by 5.25 percentage points between March 2022 and July 2023 to tame inflation.

A stable labor market is critical to keeping the economic expansion on track. Historically low layoffs account for much of the labor market stability, and have driven consumer spending.

The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 15,000 to a seasonally adjusted 1.886 million during the week ending Nov. 30, the claims report showed.

The elevated so-called continued claims are a sign that some laid-off people are experiencing longer bouts of unemployment.

The median duration of unemployment spells rose to the highest level in nearly three years in November.