Layoffs remain low, labor costs spike.

The number of Americans filing for unemployment benefits rose less than expected last week, pointing to sustained labor market strength that could push the Federal Reserve closer to raising interest rates.

Other data on Thursday showed planned layoffs by U.S.-based employers decreased 29 percent in August and labor costs in the second quarter rose far more than previously reported.

Initial claims for state unemployment benefits increased 2,000 to a seasonally adjusted 263,000 for the week ended Aug. 27, the Labor Department said on Thursday. Economists polled by Reuters had forecast first-time applications for jobless benefits rising to 265,000 in the latest week.

With the labor market nearing full employment, there probably is limited scope for further declines in claims.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 1,000 to 263,000 last week.

The Labor Department said unit labor costs, the price of labor per single unit of output, increased at a 4.3 percent annual rate as opposed to the 2.0 percent pace reported last month.

The trend in labor costs growth, however, remains moderate. Unit labor costs rose 2.6 percent from a year ago.

Hourly compensation per hour jumped at a 3.7 percent rate in the second quarter instead of the previously reported 1.5 percent pace. Productivity, which measures hourly output per worker, dropped at a 0.6 percent annual rate instead of the 0.5 percent pace of decline reported last month. It was the third consecutive quarterly drop.

In a separate report, global outplacement consultancy Challenger, Gray & Christmas said employers in the United States announced plans to shed 32,188 workers from their payrolls in August, down from 45,346 in July.

The computer sector dominated job cuts last month, with Cisco Systems announcing plans to reduce its workforce by 5,500.