Jobless claims rise - 8:45AM

Jobless Claims Climb in Latest Week - WSJ Full report from Department of Labor here WASHINGTON -- The number of idled workers filing new unemployment benefit claims climbed more than expected last week, driven higher by filings in car-industry states. Separately, U.S. producer prices climbed in April more than expected because of a jump in food costs, but core wholesale inflation rose only mildly as the recession robs companies of pricing power. The total number of unemployed drawing jobless benefits also rose, to a record 6.56 million; the increase suggests how hard it is for the jobless to find new work amid the recession. Initial claims for state jobless benefits increased 32,000 to 637,000 in the week ended May 9, the Labor Department said in a weekly report Thursday. Wall Street economists had expected a 10,000-claim increase to a level of 611,000, according to a Dow Jones Newswires survey. The prior week's level was revised to 605,000 from a previously estimated 601,000. The four-week average, which aims to smooth volatility, rose by 6,000 to 630,500. The larger-than-expected increase in new jobless claims was a disappointment, given a report last week that indicated a mild moderation in layoffs. The Labor Department had said 539,000 non-farm payroll jobs were lost in April. Payrols fell by 699,000 in March. Since the recession began in December 2007, the U.S. has shed 5.7 million jobs. A Labor Department analyst said most of the increase in new claims last week happened in states that are home to the automotive industry. "A good part of the increase is due to automotive," the analyst said. The tally of continuing jobless claims -- those drawn by workers collecting benefits for more than one week -- rose 202,000 in the week ended May 2 to 6,560,000, the highest level since the government started keeping track in 1967. Continuing claims lag new claims by one week. The unemployment rate for workers with unemployment insurance rose 0.1 percentage point to 4.9%. Not adjusted to reflect seasonal fluctuations, Illinois reported the largest increase in new claims during the May 2 week, 2,052, due to layoffs in the construction, trade, and manufacturing industries. New York state reported the biggest decrease, 13,386, due to fewer layoffs in the transportation and service industries.