WASHINGTON (AP) – The number of people filing new claims for unemployment benefits jumped last week, apparently reflecting the spring slowdown in the economy.

The Labor Department said Thursday applications for jobless benefits totaled 332,000 last week, an increase of 19,000 from the previous week that exceeded market expectations. Economists had forecast a rise of 7,000.

The level of unemployment claims was near a high of 337,000 in late May, a time of markedly weak job growth.

The latest weekly figure included some 4,000 claims for jobless benefits filed by workers in New Jersey during the weeklong state government shutdown there. Casino and racetrack employees, road construction workers and others who do not draw paychecks directly from the state lost wages as a result of the shutdown.

State workers will be paid for the days they did not work.

The jobless figure also included an unspecified number of claims stemming from seasonal shutdowns in the auto industry.

The four-week moving average for claims increased to 317,250 from 308,500 in the previous week.

Several recent indicators have provided evidence the economy slowed in the spring under the impact of surging gasoline prices, rising interest rates and a cooling housing market.

The slowing economy, soaring oil prices and interest rate jitters have soured Wall Street. Stocks plummeted for a second straight session, with the Dow Jones industrial average dropping almost 167 points Thursday for a two-day loss of 288.

Escalating violence in the Middle East carried oil to a new high, near $77 a barrel. The latest surge shook investors’ confidence, though economists said most U.S. consumers and businesses appear to be absorbing higher energy costs surprisingly well.

Consumers’ attitudes regarding the economy’s future fluctuated slightly and consumer confidence has slipped this month, according to a survey. The RBC CASH Index, based on a poll of 1,000 people conducted by Ipsos, showed consumer confidence dipping to 80.1 in July from 84.1 in June.

The confidence level still is well above May’s 78.2 – the lowest reading since October 2003.

The confidence index is benchmarked to a 100 reading in January 2002, when Ipsos started the gauge. Economists keep tabs on confidence for clues about consumers’ willingness to spend. Consumer spending accounts for two-thirds of all economic activity.

The CASH index, short for Consumer Attitudes and Spending by Household, was conducted for the Royal Bank of Canada.

U.S. employers, wary of bulking up payrolls with the economy slowing and energy prices rising, added a disappointing 121,000 jobs in June. Yet while job growth was tepid, growth in wages heated up – fanning inflation worries.

Employment data released last week also showed that the civilian unemployment rate held steady at 4.6 percent.

Slowing economic growth might justify the Federal Reserve taking a break in its two-year campaign to tighten credit by raising interest rates. On the other hand, rising prices and wages might warrant another rate increase to prevent inflation from taking off.

The count of new jobs added to the economy in June did mark an improvement from the 92,000 new positions logged in May – the fewest in seven months. But it still fell short of economists’ forecasts for an increase of around 175,000.

For the week ended July 1, the state with the largest increase in unemployment claims was Kentucky, with a rise of 6,153. The increase was attributed to layoffs in manufacturing.

Connecticut, Indiana, Massachusetts, Michigan, Mississippi, New York and Pennsylvania all reported increases in jobless claims of more than 1,000.

Four states had a decline in jobless claims exceeding 1,000, led by North Carolina – which posted a drop of 7,197, which it attributed to fewer layoffs in industries including construction, metals, textiles and lumber. The others were California, Florida and Missouri.

The state data lag behind the national jobless claims data by one week.

AP-ES-07-13-06 1817EDT


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