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Jobless claims still high
New claims for unemployment benefits dip last week, but stay well above benchmark 400,000 level.
March 13, 2003: 8:40 AM EST

NEW YORK (CNN/Money) - New weekly claims for jobless benefits in the United States dipped last week, the government said Thursday, but stayed well above a benchmark level, as the labor market continued to suffer in a sluggish economy.

The Labor Department said the number of Americans filing new claims for unemployment benefits fell to 420,000 in the week ended March 8 from a revised 435,000 the prior week. Economists, on average, expected 419,000 new claims, according to a Reuters poll.

Any number above 400,000 is generally considered to indicate a deteriorating labor market.

Separately, the Commerce Department said retail sales dropped 1.6 percent in February. Excluding sales of autos and auto parts, sales fell 1.0 percent. The results were far worse than economists expected.

U.S. stock market futures were little changed by the reports, continuing to trade higher, pointing to a positive opening on Wall Street. Treasury bond prices fell.

The report comes less than a week after the Labor Department said non-farm employers cut 308,000 jobs from their payrolls in February, as the unemployment rate rose to 5.8 percent.

Private non-farm payrolls are 2.5 million jobs lower than they were in March 2001, when economists at the National Bureau of Economic Research say a recession began. After a brief recovery in mid-2002, the labor market has worsened in recent months.

Most of the trouble, many economists believe, has been concern about the possibility of the United States going to war with Iraq. According to this view, businesses will make long-term spending and hiring plans once that situation is resolved.

Other economists, however, worry that businesses will not start hiring again until they see demand pick up significantly. Since there's little pent-up demand on the part of consumers, whose spending makes up more than two-thirds of the economy, it seems possible that the full economic recovery could take longer than most economists think.

In any event, most economists think it will be months before the labor market is growing significantly.

In the Labor Department's report Thursday, the four-week moving average of weekly jobless claims, which irons out the ups and downs of the volatile weekly data, rose to 419,750 from a revised 410,000 the prior week.

Continued claims, the number of people out of work for a week or more, rose to 3.5 million in the week ended March 1, the latest data available, from a revised 3.48 million the prior week.  Top of page

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