Department Stores Dip After Economic Data Release

CHICAGO (AP) — Shares of the nation's largest department store retailers sagged in trading Thursday after the government and a private group released disappointing manufacturing and jobs reports.

Earlier Thursday, the Labor Department said first-time claims for jobless benefits increased more than expected last week — a sign employers are reluctant to hire and the job market remains weak.

Hours later, a private trade group said Thursday that manufacturing activity expanded for the second straight month in September, but at a slightly slower pace than in August.

There was some good news, though.

Consumer spending, which accounts for 70 percent of the nation's total economic activity, jumped in August by the largest amount in nearly eight years even though personal incomes continued to lag.

The Commerce Department said Thursday that consumer spending rose 1.3 percent in August, even better than the 1.1 percent gain that had been expected. That surge was boosted by the federal government's Cash for Clunkers programs.