Though the number of Americans filing initial claims for unemployment benefits fell by 10,000 last week to 328,000, the level of jobless claims still suggests that the housing slump may be weakening the job market, reported Bloomberg News. The four-week moving average, a more steady measurement, rose to 339,000, the highest since October 2005, compared with 335,250 the prior week.

Home builders, mortgage lenders and some service industries have recently started to cut jobs. Wells Fargo & Co., the second-biggest U.S. mortgage lender, announced last week that it would eliminate 250 positions in South Carolina as part of its efforts to tighten credit standards on non-prime mortgages. New Century Financial Corp., the second-largest lender in the subprime market, cut 300 jobs, or 4 percent of its work force.

In related news, yesterday the Mortgage Bankers Association reported that its seasonally adjusted index of mortgage loan application volume increased 7 percent to 671.6, reported Forbes.com. The figures suggest that borrowers are taking advantage of declining interest rates and are asking lenders to refinance their homes.