Reaching the highest mark in four months, new unemployment claims increased by 34,000 for the week.
The Labor Department reports the 406,000 new claims for the week further illustrate a poor labor market.
With the national unemployment rate at 5.5%, US joblessness has become a major concern.
In 2001, weekly unemployment claims averaged 415,000. Any figure above 350,000 indicates a weak job market and shows poor growth in the economy. The Labor Department projects the unemployment rate will reach 5.8% by the end of the year.
Employers are looking to cut their labor costs as they are threatened by the Big Three: fuel costs, a slump in the housing market, and a national credit crisis.
Consumers have been cutting back on spending, which continues the trend as retail represents two-thirds of the economy.
Thirty-seven states reported increases in new unemployment filings. The report also found the number of continuing unemployment claims actually dropped by 9,000 to 3.1 million.
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