Weak Economy Still Struggling to Create Jobs

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There's now even more evidence the labor market is struggling to create jobs.

A new report released by the Labor Department Thursday shows the number of people applying for unemployment is at a seasonally adjusted rate of 428,000.

Benefit applications have topped 400,000 for 12 straight weeks as the unemployment rate rose to 9.1 percent.

"Another disappointing report," Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. "This report does nothing to reassure anyone that the job environment is improving."

Some economists say there were temporary factors which prompted many companies to cut back on hiring.

High gas prices have also cut into consumer spending but have fallen in the past two months. On Thursday, the national average was $3.54 per gallon, according to AAA.

Still, the U.S. economy isn't growing. Employers only generated 54,000 new jobs last month. Experts say at least 125,000 new jobs need to be created each month just to keep up with population growth. And at least twice that many jobs are needed to bring down the unemployment rate.

The International Monetary Fund on Wednesday became the latest institution to forecast weak growth for the economy this year and next. The lending organization said it expects growth of 2.5 percent this year and 2.75 percent in 2012.

Unemployment will still average 8.4 percent in 2012, the IMF predicted in its annual report on the economy.

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