Industrial Output Plunges 0.7 Percent

WASHINGTON -- The nation's industrial output plunged in April, reflecting big cutbacks in autos and other manufacturing industries.

And the number of newly laid off workers applying for unemployment benefits rose slightly last week, indicating the weak economy was still weighing on the job market.

The Federal Reserve reported Thursday that industrial production dropped 0.7 percent last month, more than double the decline that economists had expected.

Manufacturing output fell by 0.8 percent. Half of that weakness comes from large cutbacks in auto production, which has been beset by falling demand for new cars and problems related to a strike at a parts supplier for General Motors.

The Labor Department reported Thursday that applications for jobless benefits rose by 6,000 last week to 371,000. The gain was in line with expectations.

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The weak economy has triggered four straight months of job losses, often a sign that a recession has started. However, the April drop was just one-fourth the size of job losses in March, giving hope that the current economic slowdown may not be as severe as the past two recessions.

The increase of 6,000 claims applications last week was the smallest one-week move in about two months. Claims have been unusually volatile in recent weeks, reflecting strike-related layoffs in the auto industry and trouble the government had in seasonally adjusting the data to take into account an unusually early Easter.

For the week ending May 3, the total number of people receiving unemployment benefits rose by 28,000 to 3.06 million, the third straight week that this figure has been above 3 million, another sign that the weak economy is having an adverse effect on the labor market.

The number of states and territories reporting increases in claims applications for the week of May 3 totaled 26, while 27 saw decreasing claims.

New York was the state with the biggest rise in claims, a jump of 11,414 that was attributed to higher layoffs in transportation and service industries, followed by Pennsylvania, which saw an increase of 2,716.

Massachusetts had the biggest drop in claims, a decline of 5,027, which was attributed to fewer layoffs in transportation and services. Other states seeing big declines were New Jersey, down 3,259, and Georgia, with a drop of 2,935.

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