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Jobless claims drop from 7-year high

October 10, 2008|From the Associated Press

WASHINGTON — New applications for unemployment benefits dropped last week from a seven-year high, the Labor Department said Thursday, although claims remain at elevated levels that indicate recession.

And new job cuts announced after the report was released indicate Thursday's good news is likely to be short lived.

Initial claims for jobless benefits dropped 20,000 to a seasonally adjusted 478,000, the department said, the same level that Wall Street economists expected.

The department said Hurricanes Ike and Gustav were responsible for adding about 20,000 claims on a seasonally adjusted basis. That's down from about 45,000 the previous week.

The four-week average, which smooths out fluctuations, rose to 482,500, the highest since October 2001.

The number of Americans continuing to claim unemployment benefits rose to 3.66 million, above analysts' estimates of 3.6 million. That's the highest total in more than five years.

Jobless claims have come in above 400,000, a level economists consider a sign of recession, for 12 straight weeks. Claims stood at 316,000 a year ago.

Several companies announced job cuts in the last week, including EBay Inc., Kraft Foods Inc. and MetLife Inc. On Thursday, Micron Technology Inc. and Brunswick Corp. announced significant new cuts.

Micron Technology said it would close a factory and cut about 15% of its global workforce as part of a restructuring of its computer memory chip operations.

Of the 2,850 jobs being cut, about 1,500 will be slashed at its Boise, Idaho, headquarters.

Beleaguered boat maker Brunswick says it is cutting 1,400 jobs as the company closes four plants and furloughs workers at three others. Thursday's announcement comes four months after the Lake Forest, Ill., company said it would cut 1,000 jobs.

Brunswick says it plans to close plants in Washington state, Minnesota, Oregon and North Carolina. It is also furloughing workers at three facilities in Tennessee beginning Oct. 27.

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