WASHINGTON -- While September housing starts drew most of the attention Thursday, two other government reports gave a bleaker picture of the economy.þþThe Labor Department said the number of Americans lining up for new jobless benefits rose above the key 400,000 level last week, and the Federal Reserve said industrial output fell in September for the second month in a row.þþFirst-time claims for state unemployment benefits climbed by 22,000, to 411,000. Economists had expected a rise to 395,000. They view the 400,000 level as the sign of a stalled labor market.þþThe four-week moving average for new claims, which irons out weekly fluctuations, fell for the second straight week, to 408,750, but stayed above 400,000 for the seventh week in a row.þþIn a sign the pace of hiring has slowed, the number of unemployed staying on benefits for more than one week rose by 141,000, to 3.76 million, in the week ended Oct. 5, the latest for which figures are available. The jump was the largest since November 1995 and the level is the highest since May.þþThe Fed said output at factories, mines and utilities edged down by 0.1 percent in September after dropping by 0.3 percent in August. Economists had expected a 0.1 percent gain.þþManufacturing output, the largest segment in the report, dropped by 0.3 percent after a 0.2 percent decline in August.þþÿWe have a subpar manufacturing sector that is holding back growth,ÿ said Joel Naroff of Naroff Economic Advisors in Holland, Pa. ÿThat doesn't mean the economy can't move ahead, it just means that the economy is lean.þþÿBusinesses are extraordinarily cautious,ÿ he said.þþBusinesses also ran at a slower pace last month, operating at 75.9 percent of total capacity, the lowest level since May.þþÿManufacturing is slipping back, and with several industries having declined, today's release is worrisome,ÿ said Daniel J. Meckstroth, chief economist for the Manufacturers Alliance.þþ
Source: Chicago Tribune
