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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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THE DAY AHEAD

WASHINGTON (AP) -- Reports on the economy, pending home sales and foreign holdings of securities are due out today. The Commerce Department releases fourth-quarter gross domestic product at 8:30 a.m. The pending home sales index come out from the National Association of Realtors around 10 a.m. And the Treasury Department is to release its preliminary report on the June 2014 annual survey of foreign holdings of U.S. securities.

JAPAN-ECONOMY

TOKYO (AP) -- Japan's core inflation rate edged lower in January as lower crude oil prices reduced energy costs, while weak retail sales and manufacturing underscored the fragility of its economic recovery.

Core inflation, excluding volatile food prices, was 2.2 percent, compared with 2.5 percent the month before and the lowest in 10 months. Excluding energy costs and food, the consumer price index was at 2.1 percent, level with the previous two months.

Unemployment rose to 3.6 percent from 3.4 percent the month before.

Prime Minister Shinzo Abe has sought to spur growth by vanquishing the deflation that discouraged investment and spending over the past two decades. But the economy fell back into recession after a sales tax hike on April 1, 2014. Growth recovered to 2.2 percent in the October-December quarter.

GERMANY-GREECE

BERLIN (AP) -- Germany's Parliament is to vote today (FRIDAY) on the deal eurozone finance ministers hammered out to extend Greece's bailout for four months. The proposal should get wide, if unenthusiastic, support from lawmakers after a large majority in Chancellor Angela Merkel's (AHN'-geh-lah MEHR'-kuhlz) conservative bloc signaled their backing on Thursday.

In a test vote among the 311 conservative lawmakers, 22 opposed the bailout extension and five abstained. A minority of conservative lawmakers has consistently voted against bailouts over the five years of Europe's debt crisis.

SKOREA-NUCLEAR POWER

SEOUL, South Korea (AP) -- The South Korean nuclear regulator has renewed the operating license of the country's second-oldest nuclear power plant until 2022, overriding the objections of residents and anti-nuclear groups.

The Nuclear Safety and Security Commission said that seven of nine commissioners voted to restart the Wolsong No. 1 reactor located 170 miles south of Seoul.

It was the first such decision in South Korea since safety concerns about nuclear energy and older plants were raised following the meltdowns at Japan's Fukushima Daiichi reactors in 2011. South Korea's 23 nuclear power plants, mostly located in the country's southeastern coast, provide about one-third of its electricity.

The nuclear regulator said in a statement that it reviewed the plant's ability to withstand natural disasters and its compliance with other legal standards. Two commissioners who asked for more time to review the reactor's safety abstained from the vote at the end of the 14-hour meeting that began Thursday morning and ended past midnight Friday.

South Koreans were sharply divided over the fate of the Wolsong No. 1 plant that had operated for 30 years until its license expired in 2012.

TOBACCO LAWSUIT-ARKANSAS

LITTLE ROCK, Ark. (AP) -- The Arkansas Supreme Court says a lawsuit against tobacco giant Philip Morris USA can proceed under class-action status.

The lawsuit seeks refunds on every pack of Marlboro Lights sold in Arkansas from 1971 to 2010. The plaintiffs claim Philip Morris, which is part of the Altria Group, deceived smokers about health risks.

The justices' 6-1 decision was released Thursday.

The company wants each case considered separately, saying some smokers bought the cigarettes for their taste, packaging or brand reputation -- not for claims they had lower tar and nicotine.

Philip Morris also said courts elsewhere have rejected class-action status for similar claims.

The size of the class isn't known, but Pulaski County Circuit Judge Tim Fox warned in 2013 that it could be in the millions.

IRS-LOST EMAILS

WASHINGTON (AP) -- Investigators say they have recovered 32,000 emails related to a former IRS official at the heart of the agency's tea party scandal.

But they don't know if any of them are new.

The emails were to and from Lois Lerner, who used to head the IRS division that processes applications for tax-exempt status. Last June, the IRS told Congress it had lost an unknown number of Lerner's emails when her computer hard drive crashed in 2011.

IRS officials said the emails could not be recovered. But at a congressional hearing Thursday, IRS Deputy Inspector General Timothy Camus said investigators recovered thousands from old computer tapes.

However, the inspector general has not determined how many of the emails might be duplicates of the 78,000 Lerner emails already produced by the IRS.

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