Jobless Claims Soar to Highest Levels Since 2005

The number of people who applied for unemployment benefits last week soared to the highest level in more than two-and-a-half years, reinforcing fears that the U.S. economy is in trouble.

The Labor Department reported Thursday that new applications filed for unemployment insurance climbed by 38,000 to 407,000 for the week ending March 29. The increase left claims at their highest point since September 17, 2005 — shortly after Hurricane Katrina tore through the Gulf Coast states.

The jobless figures were worse than economists had anticipated. Analysts had predicted claims would be around 365,000.

A Labor Department official said there were no special factors to explain the increase in initial claims. But he said seasonal adjustments to the data because of the early arrival of this year's Easter holiday may have influenced the reading.

Economists said the rising claims are a sign that the nation's housing, credit and financial problems are affecting ordinary employers. Businesses are shedding some workers and being cautious about hiring because of economic uncertainty.

The last time unemployment claim levels were consistently more than 400,000 was during the most recent recession seven years ago.

From NPR and wire reports

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