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Weekly US jobless claims hit 9-month high of 379K

Updated: Friday, December 20, 2013 |
Weekly US jobless claims hit 9-month high of 379K story image
WASHINGTON (AP) - The number of people seeking U.S. unemployment benefits rose 10,000 last week to a seasonally adjusted 379,000, the highest since March. The increase may reflect volatility around the Thanksgiving holidays.

The Labor Department said Thursday that the less volatile four-week average jumped 13,250 to 343,250, the second straight increase.

Applications are a proxy for layoffs. Last month, they fell to nearly the lowest level in six years, as companies cut fewer jobs. But two weeks ago, they surged 64,000 to 369,000.

Economists dismissed that spike, saying it likely reflected a Thanksgiving holiday that fell later in the month. That can distort the government's seasonal adjustments. But if the trend continues it would be a troubling sign of rising layoffs.

The number of people receiving benefits rose sharply. More than 4.4 million people received unemployment benefits in the week ended Nov. 30, the latest data available. That was 600,000 more than the previous week. Those figures aren't adjusted for seasonal patterns.

Still, most other recent job market data has been positive and economists generally expect unemployment benefits applications will soon fall back.

"We are inclined to ignore the recent claims data," said Joseph LaVorgna, an economist at Deutsche Bank. "We see little evidence to suggest that the labor market trend of the past few months has meaningfully changed."

Hiring has been healthy for the past four months. The economy added an average of 204,000 jobs a month from August through November, a solid improvement from earlier in the year. The unemployment rate fell in November to a five-year low of 7 percent.

The unemployment rate remains above the historic averages of 5 percent to 6 percent that are associated with strong job markets.

Federal Reserve Chairman Ben Bernanke said Wednesday that he expects the robust job gains to continue. Americans are spending more and the economy is less restrained by higher taxes and government spending cuts, he said.

Those trends have "increased our confidence that the job market gains will continue," Bernanke said at a press conference.

The Fed said Wednesday that it would scale back its monthly bond purchases to $75 billion from $85 billion. The purchases are intended to lower long-term interest rates and encourage more spending. The cut suggests that Fed policymakers think the job market and economy will continue to improve even with less help from the Fed.
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ECONOMY-GDP

WASHINGTON (AP) -- After a dismal winter, the U.S. economy sprang back to life in the April-June quarter, growing at a fast 4 percent annual rate on the strength of higher consumer and business spending.

The Commerce Department says the second-quarter rebound followed a sharp 2.1 percent annualized drop in economic activity in the January-March quarter. That figure was revised up from a previous estimate of a 2.9 percent decline. But it was still the biggest contraction since early 2009 during the depths of the Great Recession.

Last quarter's rebound was broad-based, with consumers, businesses, the housing industry and state and local governments all combining to boost growth.

Economists expect that momentum to continue in the second half of this year, when they forecast growth of around 3 percent.

ADP

WASHINGTON (AP) -- A private survey shows that businesses hired at a healthy pace in July, though the job gains slowed from the previous month.

Payroll processer ADP says private employers added 218,000 jobs last month, down from 281,000 in June. It was the fourth straight month of job gains above 200,000, a healthy pace that usually is enough to lower the unemployment rate.

The figures suggest that the government's jobs report, to be released Friday, will also show a solid increase. But the ADP numbers cover only private businesses and often diverge from the government's more comprehensive report.

Economists forecast that the government's report will show that 235,000 jobs were added in July, while the unemployment rate stayed at 6.1 percent, according to a survey by FactSet.

HEALTH OVERHAUL

WASHINGTON (AP) -- Officials tell The Associated Press that a nonpartisan investigative report concludes that management failures by the Obama administration set the stage for the computer problems that paralyzed the HealthCare.gov website last fall.

The Government Accountability Office -- the investigative agency of Congress -- will report Thursday on its months-long investigation.

GAO said the administration kept changing marching orders for contractors who built the computerized sign-up system, creating widespread confusion and leading to tens of millions of dollars in additional costs.

Republican and Democratic congressional aides briefed on the report say it faults the Centers for Medicare and Medicaid Services for ineffective oversight.

CMS is the lead agency administering President Barack Obama's health care law.

The aides spoke on condition of anonymity to discuss the report ahead of its release.

IRS-INVESTIGATION

WASHINGTON (AP) -- A former IRS official at the heart of the agency's tea party controversial calls Republicans "crazies" and more in newly released emails.

Lois Lerner used to head the IRS division that handles applications for tax-exempt status. In a series of emails with a colleague in November 2012, Lerner made two disparaging remarks about members of the GOP, including one remark that was profane.

Republican Congressman Dave Camp, who chairs the House Ways and Means Committee, released the emails today as part of his committee's investigation. Camp says the emails show Lerner's disgust with conservatives.

In one email, Lerner called them crazies. In the other, she used a profanity.

Congress and the Justice Department are investigating whether the IRS improperly scrutinized applications for tax-exempt status from conservative groups.

CONGRESS-OVERSEAS TAX BREAKS

WASHINGTON (AP) -- Republican senators have blocked an election-year bill limiting tax breaks for U.S. companies that move operations overseas.

The bill would have prevented companies from deducting expenses related to moving their operations to a foreign country. The bill also would have offered tax credits to companies that move operations to the U.S.

Democrats championed the bill, saying it would end senseless tax breaks for firms that ship jobs abroad.

Republicans called the bill an election-year stunt. They noted that Democrats tried to pass a similar bill two years ago, right before the last congressional elections.

The White House says President Barack Obama supports the bill.

GENERAL MOTORS-LAWSUIT

DETROIT (AP) -- A Texas lawyer has sued General Motors on behalf of 658 people injured or killed in crashes allegedly caused by faulty ignition switches.

The lawsuit filed Tuesday in U.S. District Court in Manhattan names 29 people who were killed and 629 who were hurt. All the crashes occurred after GM left bankruptcy protection in July 2009. That makes them exempt from GM's efforts to shield itself from claims due to crashes that happened before the bankruptcy, attorney Robert Hilliard said.

Hilliard said he wants to file another 248 cases from before the bankruptcy, including 21 deaths.

The lawsuit alleges GM knew about defective switches that can cause engines to stall since 2001, yet it didn't recall any cars until this year. GM would not comment on the lawsuit.

HYUNDAI-SONATA RECALL

DETROIT (AP) -- Hyundai is recalling its popular Sonata midsize sedan to fix problems with the gear shift levers.

The recall covers 883,000 cars from the 2011 through 2014 model years.

The Korean automaker says the automatic transmission shift cable can separate from the shift lever. If that happens, the lever may not show the correct gear, increasing the risk of a crash.

The company says in documents posted Wednesday by U.S. safety regulators that it has received 1,171 warranty claims about the problem, plus seven other reports with related symptoms. The documents don't say if there have been any crashes or injuries.

Hyundai will notify owners by letter between now and the end of September. Dealers will inspect the shift cables and repair the connection if needed.

KAWASAKI-RECALL

NEW YORK (AP) -- About 11,000 Kawasaki off-road vehicles are being recalled because debris can cut through the foot rest area and hurt riders' legs.

The recall is for 2012 and 2013 Kawasaki Teryx4 750 vehicles with four-wheel drive. They were sold at Kawasaki dealers from October 2011 to July 2013 for about $13,400.

The U.S. Consumer Product Safety Commission said Wednesday that there have been four reports of debris breaking through the floor boards of the vehicles. Two riders reported injuries to their toes and thighs.

Owners of the recalled vehicles should stop using it and contact a Kawasaki dealer, or call 866-802-9381, to get a free repair. Kawasaki said it will install floor board guards and replace damaged floor boards on the recalled vehicles.

ITALY-EARNS-FIAT

MILAN (AP) -- Italian carmaker Fiat SpA, which controls Chrysler, says its second-quarter profits dropped by more than a half due to lower performance in North and Latin America.

Fiat said Wednesday that net profit was 197 million euros ($263 million), compared with 435 million euros in the same period last year.

North American volumes were up 10 percent, driven by incentives to sell legacy Chrysler vehicles, but the incentives also cut into profits. Earnings before interest and tax in the region dropped 18 percent to 598 million euros.

In Latin America, revenues dropped 13 percent as vehicle shipments fell 21 percent.

Fiat said revenues in the quarter rose to 23.3 billion euros, up 1 billion euros over the same quarter last year.

Fiat is currently finalizing its merger with Chrysler.

FRANCE-EARNS-AIRBUS

PARIS (AP) -- European aerospace company Airbus says it expects its revenue to remain stable this year despite a big cancellation recently for some of its large A350 planes.

Airbus competes fiercely with Chicago-based Boeing Co. in the global market for large civilian aircraft. It took a hit in June when Emirates airline cancelled an order for 70 of the twin-aisle planes, opting for Boeing models instead.

Since then, however, Toulouse-based Airbus has announced a raft of new orders for its fuel-efficient A330neo.

In its earnings statement Wednesday, the company said revenue rose 7 percent in the second quarter from the previous year, to 14.6 billion euros ($19.5 billion). That helped boost its net income to 696 million euros from 531 million euros.

It expects deliveries to remain stable this year.

EARNS-WELLPOINT

INDIANAPOLIS (AP) -- WellPoint's second-quarter profit fell 8.6 percent as expenses climbed.

Its performance beat Wall Street's expectations.

The Indianapolis health insurer reported Wednesday that net income declined to $731.1 million, or $2.56 per share, from $800.1 million, or $2.64 per share, in the same quarter a year earlier.

Earnings, adjusted for investment gains, came to $2.44 per share. The average per-share estimate of analysts surveyed by Zacks Investment Research was for earnings of $2.28.

Total expenses increased to $17.21 billion from $16.48 billion.

Operating revenue, which excludes investment gains or losses, rose 4.2 percent to $18.23 billion from $17.49 billion. That is slightly above the $18.22 billion Wall Street forecast.

Shares of WellPoint Inc. are up almost 22 percent this year.

JAPAN-EARNS-NINTENDO

TOKYO (AP) -- Nintendo Co. sank to a worse-than-expected loss for the fiscal first quarter on lagging Wii U video-game machine sales.

But the Japanese company behind Super Mario and Pokemon games stuck to its annual profit and sales forecasts Wednesday.

Kyoto-based Nintendo reported a 9.92 billion yen ($97.3 million) April-June loss compared with an 8.62 billion yen profit a year earlier.

Quarterly sales totaled 74.695 billion yen ($732.3 million), down 8 percent from a year earlier.

Nintendo has been fighting to maintain profits amid competition from games on smartphones and other devices.

Nintendo has also faced questions about the health of its president, Satoru Iwata, who said he had surgery earlier this month.

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