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Jobless Claims Up As Retail Sales Slip

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By CHRISTOPHER S. RUGABER

The Associated Press

Published: March 13, 2009

WASHINGTON - With layoffs spreading, the number of initial claims for jobless benefits rose last week, while the total number of people continuing to receive benefits set a record high, the government said Thursday.

The Labor Department reported that first-time requests for unemployment insurance rose to 654,000 from the previous week's upwardly revised figure of 645,000, above analysts' expectations.

The number of people receiving benefits for more than a week increased by 193,000 to 5.3 million, the highest seen on records dating back to 1967. That's the sixth time in the past seven weeks that jobless claims rolls have set a record high.

Separately, the Commerce Department said retail sales fell by 0.1 percent in February, though that drop was much less than the 0.5 percent analysts expected. The government also revised January's performance to show a 1.8 percent retail boost, the biggest increase in three years and stronger than the 1 percent gain that was originally reported.

Still, analysts don't expect any sustained rebound in consumer spending soon, given the severity of the recession.

Businesses, meanwhile, slashed inventories for a fifth straight month in January as they struggled to cope with the deepening recession. The five consecutive declines marked the longest stretch of reductions since inventories were cut for 15 straight months from February 2001 to April 2002 - during the last recession.

The labor market has been hammered as employers, squeezed by cutbacks in consumer and business spending, shed jobs at a rapid pace.

The four-week average of new claims, which smooths out fluctuations, rose to 650,000, the highest in more than 26 years, though the work force has grown by about half since then.

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