Jobless claims ease from 6-year high

NEW YORK (CNNMoney.com) -- The number of out of work Americans who signed up for jobless benefits fell slightly last week from a six-year high.

The Department of Labor reported Thursday that initial filings for state jobless benefits decreased by a seasonally adjusted 10,000 to 450,000 in the week ended Aug. 9.

However, the decrease in claims was far short of expectations. A consensus of economists surveyed by Briefing.com was for claims to fall to 436,000. This week's filings marked the first time that claims fell since the first week in July.

The four-week seasonally adjusted moving average of new jobless claims grew 19,500 to 440,500 in the past week. Last year, the figure was 315,500. The average is used to smooth out weekly fluctuations.

President Bush signed a bill in June to extend unemployment benefits by as long as 13 weeks for some. The new law is one of the reasons why the number of claims was so much higher than economists' predictions, according to Gus Faucher, an economist with Moody's Economy.com.

"We've had two weeks of elevated claims because of the extension of benefits, and that's a temporary factor. The extension is going to keep claims high for the next few weeks, then claims will go back down," Faucher said.

According to the Labor Department, in an attempt to notify hundreds of thousands of Americans about the extension, the department discovered many were eligible for initial unemployment claims- and not just an extension of benefits.

The number of people continuing to receive unemployment benefits rose in the week ended Aug. 2 by 114,000 to 3.4 million. That number stood at 2.6 million people last year.

The four-week moving claims average for those continuing to receive unemployment benefits rose by 75,250 to 3.3 million.

Employers have cut jobs every month so far this year, pushing total losses to 463,000. Meanwhile, the nation's unemployment rate jumped to a five-year high of 5.7% last month.

In the past week, Wachovia reported that it would lay off 600 workers, Ford reported it would cut 300 jobs and HSBC announced last week it would lose about 600 jobs.

A report Thursday showed inflation at its highest level in more than 17 years, spurred by costlier food and energy. The Consumer Price Index rose at an annual rate of 5.6%, after an increase of 0.8% in July.

In separate reports, the median home price fell 7.6% in the second quarter from a year earlier, and the national foreclosure rate jumped 8% month-over-month and at a 55% annual pace in July.

Alan Greenspan, former chairman of the Federal Reserve, told The Wall Street Journal that housing prices could "start to stabilize or touch bottom" at some point in the first half of next year. But he added that it's possible "prices could continue to drift lower through 2009 and beyond."