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US jobless claims hit six-year high
US reports 7,000 new jobless claims in one week.
Last Modified: 07 Aug 2008 16:56 GMT
US workers have been affected the slump
in the economy [GALLO/GETTY]

The number of US citizens claiming unemployment benefits has risen by more than 7,000 in the past week, taking the total number to its highest level for six years.

The US labour department said on Thursday that new applications for unemployment insurance rose to 455,000 for the week ending August 2.

The rise in jobless claims is the latest blow to the US economy, which has been teetering on the brink of recession.

Government analysts say the numbers may have been partly affected by a federal programme to extend unemployment benefits to cushion the impact of a slowing economy.

Subprime crisis

Economists said the impact of the government programme made it difficult to know what was going on in the labour market, but the general sense of jobs being tough to find was clear.

"Anything above 400,000 is in recession range. It does make it easier to call it a recession," said David Wyss, chief economist at Standard & Poor's Ratings Services in New York.

The US economy has been weakened by the impact of the subprime mortgage crisis, when many in the US took out high-interest mortgages that they could not afford to repay.

The fallout has rocked international markets, with many large lenders taking large losses as a result.

Source:
Agencies
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