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Jobless claims rise

WASHINGTON - The number of newly laid off workers filing for unemployment benefits rose last week to the highest level in nearly two months, providing more evidence that the weak economy is drying up jobs.

The Labor Department said Thursday that applications for jobless benefits totaled 378,000 last week. That was an increase of 22,000 from the previous week and was a far bigger jump than had been expected.

The four-week average for new claims rose to 365,250, which was the highest level since a flood of claims caused by the 2005 Gulf Coast hurricanes.

The current economic slowdown, which many economists believe has already turned into a full-blown recession, is starting to show up in the labor market in terms of higher layoffs and weaker hiring numbers.

The total number of payroll jobs fell by 63,000 in February, an even bigger decline that the drop of 22,000 jobs in January, which had been the first monthly decline since mid-2003.

'We have no doubt that the trend in claims is upwards and is approaching the levels seen in the earlier stage of the recession in 2001,' said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

Part of the increase in benefit applications in recent weeks occurred because of a three-week strike at a major parts supplier to General Motors Corp., which has forced GM to close all or part of 28 plants, affecting more than 37,000 hourly workers.

The number of unemployed workers who are receiving benefits totaled 2.865 million, the largest amount since late August 2004.

Analysts said this increase was a worrisome sign that the economic weakness was boosting layoffs and making businesses cautious about hiring new workers.