NEW YORK (CNNfn) - New jobless claims rose to the highest level in nearly nine years in the United States last week, the government said Thursday, a sign that the labor market is weakening further.|
New claims for state unemployment benefits jumped to 432,000 last week from 419,000 the prior week, the Labor Department reported. It was the highest since Sept. 19, 1992, when 438,000 people filed new claims for jobless benefits.
Analysts surveyed by Briefing.com had forecast new claims of 418,000 for the week ended June 2.
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The four-week moving average of new claims, considered a better gauge of jobless trends, rose to 413,500 from the previous week's 402,500.
Economists watch the four-week moving average more closely since it smoothes fluctuations in the weekly data. The May 26 four-week average was the highest since Oct. 3, 1992, when it stood at 417,250.
Continued claims – for workers who already have received at least a week of benefits -- rose to 2.99 million in the week ended May 26, the latest data available, from a revised 2.78 million the previous week. It was the highest level since a reading of 3.04 million in early November 1992.
In another sign of economic weakness, big retailers reported weak sales for May, hurt by cool weather and consumers who are worried about their jobs and reluctant to increase spending.
On Wall Street, stocks were mixed.
A government report said inventories of both long-lasting goods like automobiles and less-permanent items such as clothing and pharmaceuticals rose in April. That month, wholesale inventories also increased 0.3 percent to a seasonally adjusted $302.7 billion, the highest level since last December.
The economy grew at an anemic annual rate of 1.3 percent in the first quarter and many analysts believe it expanded at around the same rate or less in the current quarter. Federal Reserve Chairman Alan Greenspan, in a May 24 speech, said the worst of the slowdown, which started in the second half of last year, may not be over.
To cope with flagging demand, companies have sharply cut production and laid off workers. In May, the unemployment rate edged down to 4.4 percent, but businesses eliminated 19,000 jobs.
To prevent the country from tipping into recession, the Fed has slashed interest rates five times this year, driving borrowing costs down to their lowest point in seven years.
-- from staff and wire reports