Jobless claims not as bad as projected; retail sales up 1 percent

WASHINGTON (AP) — Nearly 5 million Americans continued to draw jobless benefits late last month, and new requests again exceeded 600,00 as companies lay off scores of workers amid a deepening recession.

The Labor Department said Thursday that the number of initial jobless benefit claims dropped to a seasonally-adjusted 623,000, from an upwardly revised figure of 631,000 the previous week. The latest tally still was above analysts' expectations of 610,000 claims.

And in a sign that laid-off workers are having difficulty finding new work, the number of people claiming benefits for more than one week rose to 4.81 million from 4.78 million, the highest total since records began in 1967. The continuing claims data lag new claims by a week.

An additional 1.5 million people are receiving benefits under an extended unemployment compensation program approved by Congress last year, bringing the total number of recipients to 6.3 million.

Continuing claims are up sharply from a year ago, when the figure was 2.7 million.

Meanwhile, U.S. retail sales jumped 1 percent in January, reversing a six-month declining trend and defying economists' expectations by posting the biggest increase in 14 months.

The Commerce Department says January retail sales rose a percent from December after having fallen for six straight months. Wall Street economists surveyed by Thomson Reuters had expected January sales to show a drop of 0.8 percent. They plunged 2.7 percent in December, which had the weakest holiday selling season since at least 1969.

The January report shows strong increases in sales of automobiles and in general merchandise stores – the "big box" outlets – though sales by department stores, carrying fewer varieties of items, posted a decline.