Initial Claims Up 22,000 to 496,000

WASHINGTON (TheStreet) -- The latest jobless figures continue to show a struggling labor market, as a larger-than-expected number of people applied for state unemployment insurance for the first time last week.

Initial claims for jobless benefits rose to a seasonally adjusted 496,000 for the week ended Feb. 20, according to Labor Department statistics released Thursday. That reflects a sharp rise of 22,000 applicants from the week before, which itself was revised slightly higher to 474,000 from 473,000 in this latest report.

Wall Street expected initial claims to fall to 460,000, according to consensus forecasts provided by Briefing.com.

The four-week moving average for initial claims, which tends to iron out the wild swings that occur during the month, also rose by 6,000 to 473,750.

At the same time, the number of those continuing on claims grew to 4.617 million for the week ended Feb. 13 from an upwardly revised 4.611 million in the week prior.

The downbeat report helped sink stocks in the morning, with the Dow Jones Industrial Average down 156 points, or 1.5%, to 10,218.

Jobless claims figures have trended higher in recent weeks as lawmakers and regulators have begun placing greater emphasis on job growth. Just this week, the Democrat majority in the Senate corralled enough Republican votes to bypass a filibuster and pass a $15 billion jobs stimulus package.

In his testimony to the House Financial Services Committee on Wednesday, Federal Reserve Chairman Ben Bernanke said the economy is improving, but the labor market remains a needling headwind that could stifle a sustained recovery.

About 8.4 million jobs were shed since the beginning of the recession. Even more startling, a government report showed an estimated 6.3 million people were out of work for six months or more in January. And job cuts are continuing at several major firms, with Boeing(BA), Humana(HUM), Merck(MRK), Wal-Mart(WMT) and Verizon(VZ) each making layoff headlines in recent days and weeks.

Next week, the Labor Department will also release its highly anticipated February jobs report. Early consensus estimates anticipate employers slashed another 20,000 jobs from nonfarm payrolls, as the unemployment rate ticked a tenth of a percent higher to 9.8%.

-- Written by Sung Moss in New York

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