U.S. Jobless Claims Average Jumps to 2 1/2-Year High

[Omaha Steve]

http://www.bloomberg.com/apps/news?pid=20601087&sid=anoS5A7Unxvs&refer=home

By Bob Willis and Shobhana Chandra

March 27 (Bloomberg) -- The number of Americans filing first-time claims for unemployment benefits fell last week, while a less volatile measure of the labor market rose to a 2 1/2-year high.

Initial jobless claims dropped by 9,000 to 366,000 in the week that ended March 22, the Labor Department said today in Washington. The four-week moving average of first-time claims increased for a third straight week, reaching 358,000, the highest since October 2005.

The figures indicate that U.S. employers are cutting jobs or delaying hiring, as the deepening housing slump raises the odds of a recession. Fewer jobs may slow consumer spending, which accounts for more than two-thirds of the economy.

``The underlying jobless claims numbers are climbing and that's a pretty good indication of the softness in the labor markets,'' said Stephen Gallagher, chief U.S. economist at Societe Generale SA in New York. ``Businesses are nervous and are cautious.''

Another government report showed the U.S. economy grew at an annual pace of 0.6 percent from October though December, weakened by a deepening housing slump that may be bringing the six-year expansion to an end. The gain in gross domestic product followed a 4.9 percent third-quarter growth rate, the Commerce Department said today in Washington. Measures of inflation were revised down and corporate profits dropped.

Economists' Estimates

Initial jobless claims were estimated to drop to 370,000 from 378,000 initially reported for the prior week, according to the median projection of 34 economists in a Bloomberg News survey. Estimates ranged from 350,000 to 415,000.

FULLL story at link.