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Jump in unemployment claims stirs more worries

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The Labor Department reported this morning that the number of people filing claims for unemployment compensation jumped by 69,000 last week to 375,000, the biggest increase since September 2005 and up to the levels reached after Hurricane Katrina hit the Gulf Coast that year, the Associated Press reported.

In another report, the Commerce Department said consumer spending rose by only 0.2 percent in December, which is just at the pace of inflation and below the 1 percent increase in November.

The Martin Luther King Jr. holiday could have affected jobless claim figures, but the four-week average of weekly claims also rose to 325,750 last week from 315,500 the week before. This could heighten worries about a recession, because declining jobless claims had been one of the few signs that the economy wasn’t deteriorating.

The Labor Department also reported that U.S. employment costs rose by 0.8 percent in fourth-quarter 2007, leading to a year-over-year gain of 3.3 percent.