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October 22, 1999
Jobless Claims Rise by 9,000
The
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number of Americans filing new applications for unemployment benefits rose by 9,000 last week, but economists said even with the slight increase U.S. businesses still are scrambling to find workers. 

The Labor Department said Thursday that 298,000 people filed new claims for jobless benefits for the week ending Oct. 16, compared with 289,000 filing claims the previous week, when the figure had dropped by 25,000. 

The increase pushed the four-week moving average to 300,750, the first time it has been above the 300,000-level in three months. But even with the small rise, the number of newly laid off workers remains at historically low levels. 

The unemployment rate in September remained at a 29-year low of 4.2 percent and many economists believe strong economic growth could push that rate down even lower to 4.1 percent in October. 

The Federal Reserve, worried that tight labor markets could lead to rising wage demands and higher inflation, has pushed interest rates up twice this year. 

Some economists believe a third rate increase will occur at the Fed's next meeting on Nov. 16 because of Fed concerns that economic activity must be slowed further to make sure inflation does not get out of hand. 

"The tight labor market remains the Fed's chief concern," said Karen Dexter, economist at Merrill Lynch in New York. 

She said the number of continuing unemployment claims remained at a low level of 2.22 million persons for the week ending Oct. 9, ``suggesting that laid-off workers are having little trouble finding new jobs.'' 

In a second report, a national survey showed that mortgage rates are continuing their upward climb. 

The average interest rate on 30-year fixed-rate mortgages rose to 7.93 percent this week, the highest level in two months, according to the survey done by Freddie Mac, the mortgage company. It was the highest level since rates hit 8.15 percent in mid-August, the high point for this year and a level not seen since April 1997. 

Robert Van Order, Freddie Mac's chief economist, said that recent government reports showing higher inflation pressures at the wholesale and retail level were contributing to the pressure on mortgage rates. The government reported Tuesday that consumer prices jumped 0.4 percent in September, the biggest increase in five months. 

``Results of the Producer Price Index and Consumer Price Index spooked the financial markets,'' he said, while predicting that rates should hold where they are in coming weeks. 

``Interest rates seem to have leveled off for the time being at least and I don't expect much of a change in the very near future,'' Van Order said. 

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