Unemployment at a Six-Year High

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An unexpected jump in the nation's unemployment figures has Wall Street jittering with the Dow falling more than 80 points in afternoon trading.

New applications for unemployment benefits rose from 7,000 to 455,000 last week, the Labor Department reports. That's the highest level it's seen since March 2002 - and the nation's shaky economy is to blame.

With slowing customer demand, harder-to-get credit, and high gas prices, employers have been forced to trim back their workforce. It's a situation that may lead many consumers to cut back on some of their spending.

"Consumers will be very tight fisted in the coming months," predicted Richard Yamarone, economist at Argus Research. "Nothing shuts down the consumer - and the economy - like the loss of a job."

But the economy is showing some signs of recovery. The number of pending home sales rose 5.3 percent in June.

Although that's still far below last year's levels, some believe the increases signal that the worst is over for the housing market.

Source: The Associated Press

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