New claims for state jobless benefits unexpectedly rose last week, while manufacturing activity and employment slowed last month, heightening fears the US economic recovery is stalling.

The data yesterday added to concerns over the risk of a double-dip recession, although many analysts said a renewed downturn was unlikely as the production side of the economy continues to expand, though less briskly than earlier.

"None of the data is good for the bullish camp, which was expecting a V-shaped recovery for the rest of the year. These numbers suggest fatigue in the consumer sector," said market strategist Joseph Battipaglia at Stifel Nicolaus, Yardley, Pennsylvania.

Initial claims for state unemployment benefits increased 13,000 to 472,000, the Labour Department said, above market expectations for 452,000.

In a report, the Institute for Supply Management said its barometer of manufacturing activity slipped to 56.2 in June from 59.7 the prior month, with growth in the employment index moderating slightly.

While layoffs have slowed sharply from early last year, businesses remain skeptical of the strength of the recovery and are holding back on hiring, keeping claims for unemployment benefits at uncomfortably lofty levels.

High unemployment is a sore point for President Barack Obama, whose approval ratings have plummeted, and it could cost his fellow Democrats dearly at the November polls.

More than eight million Americans lost jobs during the recession, but employment growth has been so tepid that it could take years for many to find work again.

"It's looking more and more like the job market is treading water. Layoffs are down from 2009, but hiring hasn't really picked up and this is disappointing," said Stephen Bronars, senior economist at Welch Consulting, Washington.

"There is a lot of uncertainty on the hiring side that's causing things to remain sluggish. In order for the recovery to give people confidence it needs to cut across different sectors of the economy."

The claims data has no implications for the June report due today as it falls outside the survey period.-Reuters