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BLBG: U.S. Initial Jobless Claims Rose by 12,000 to 669,000 Last Week
 
The number of Americans filing unemployment claims unexpectedly rose to the highest level since 1982 last week and those staying on benefit rolls jumped to a record as companies kept cutting jobs to trim costs.

Initial jobless claims swelled by 12,000 to 669,000 in the week ended March 28, topping 600,000 for a ninth straight time, after a revised 657,000 the prior week, the Labor Department said today in Washington. The number of people staying on benefit rolls soared in the prior week to 5.73 million.

Another Labor Department report tomorrow may show the jobless rate in March rose to the highest in more than 25 years, reinforcing concerns that the economy will continue to bleed jobs as companies reduce output. Less employment and slowing incomes may thwart a rebound in consumer spending, setting back prospects for an economic turnaround in the second half of 2009.

``Companies are unsure of when demand will bounce back on a sustainable basis, so they're continuing to reduce the labor force,'' Joseph Brusuelas, a director at Moody's Economy.com in West Chester, Pennsylvania, said before the report. ``Personal consumption is in the process of stabilizing, and job losses will dampen that.''

The Labor Department tomorrow may say the jobless rate last month climbed to 8.5 percent, the highest level since 1983, according to the median forecast in a Bloomberg survey. Payrolls probably fell by 660,000 workers, bringing total job losses since the downturn began to about 5 million.

Initial claims were estimated to fall to 650,000 from 652,000 initially reported for the prior week, according to the median projection of 43 economists in a Bloomberg News survey. Estimates ranged from 630,000 to 682,000.

Four-Week Average

The four-week moving average of initial claims, a less volatile measure, rose to 656,750 from 650,250, today's report showed. Continuing claims were the highest since records began in 1967, rising from 5.57 million.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, increased to 4.3 percent in the week ended March 21, the highest since 1983, from 4.2 percent. These data are reported with a one-week lag.

Twenty-four states and territories reported an increase in new claims for the week ended March 21, while 29 reported a decrease.

Initial jobless claims reflect weekly firings and tend to rise as job growth, measured by the monthly non-farm payrolls report, slows.

ADP Report

Companies cut an estimated 742,000 workers in March, the most since records began in 2001, according to figures released yesterday by ADP Employer Services. Also yesterday, Challenger, Gray & Christmas Inc. reported that job cuts announced by U.S. employers nearly tripled in March from a year earlier.

Cardinal Health Inc. reported its clinical and medical products businesses, which are to be spun off later this year as CareFusion Corp., will reduce their global workforce by about 800 over six months and shed an additional 500 positions through normal attrition and not filling open roles.

The moves are ``necessary to help offset current economic conditions,'' Chief Executive Officer Kerry Clark said in a March 31 statement.

Tyson Foods Inc., the largest U.S.-based meat producer, last week said it will close a processed-meats plant in Oklahoma and cut 580 jobs to move production to other locations.

The economy contracted at a 6.3 percent pace in the fourth quarter, the worst performance since 1982, and should the recession continue through the end of April it will be the longest in seven decades.

Still, recent reports show February retail sales fell less than expected and consumer purchases gained in the first two months of the year. Home sales and durable-goods orders also both rose unexpectedly in February.

Source