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Jobless claims jumps to highest level since late November

Jobless claims jumps to highest level since late November

The number of laid-off workers filing claims for unemployment benefits shot up last week to the highest level since late November.
The Labor Department reported that a total of 329,000 newly unemployed workers filed applications for jobless benefits, an increase of 10,000 from the previous week.
In other economic news, many of the nation's big retail chains reported disappointing results from the holiday shopping season.
After a rousing start right after Thanksgiving (Nov. 23), many stores struggled during December as warmer-than-usual weather depressed sales for winter clothing. Analysts said the sales results were also depressed by the shift to purchasing gift cards, which are not counted as sales until they are redeemed.
Wal-Mart Stores Inc. reported a better-than-expected 1.6 percent increase in December at stores open at least a year, but the gain followed a decline of 0.1 percent in same-store sales in November, the first drop in a decade. Among the retailers whose sales fell below expectations were Limited Brands and Bebe Stores Inc.
The total number of jobless claims was the largest since 358,000 claims were filed the week of Nov. 25 and the advance was well above the increase analysts had been expecting.
But even with the latest increase, the third consecutive weekly rise, claims continue to be at a level indicating a generally healthy labor market despite a slowing economy. The four-week moving average for weekly claims edged up to 317,500, compared to 316,250 the previous week. It was the highest level for the four-week average since Dec. 16.
Employers have been reluctant to lay off existing workers although they have trimmed plans to hire new workers in the face of the serious housing slump that has depressed overall economic growth.
Analysts believe that when the unemployment report is released on Friday it will show that the jobless rate remained stable at 4.5 percent in December as businesses created 110,000 new jobs. That would be down from 132,000 jobs added in November.
The economy slowed to a lackluster growth rate of just 2 percent in the summer as a steep slide in housing construction trimmed 1.2 percentage points from growth. Analysts believe housing subtracted a similar amount from growth in the final three months of this year and will continue to depress activity through the middle of 2007.
In addition to the weakness in housing, auto manufacturers have also been struggling to reduce a high backlog of unsold vehicles.
However, analysts say there is a slim chance of a recession as a result of the problems in housing and manufacturing. They also say they believe the slowdown will cause the jobless rate to rise to around 5 percent this year but think economic activity will pick up in the second half of 2007.
For the week ending Dec. 23, a total of 319,000 claims were filed. In that week, 39 states and territories reported an increase in claims and 13 had a decrease with one reporting no change.


Updated : 2021-10-22 15:44 GMT+08:00