Bloomberg News

WASHINGTON - The average number of workers filing new claims for jobless benefits rose to a two-and-a-half-year high last week as layoffs at auto plants and steel mills hastened the cooling in economic growth, government figures showed.

The four-week moving average of claims rose 1,250 in the week that ended Dec. 2, to 345,250, the Labor Department reported. That is the highest since mid-July 1998, when strikes hobbled production at General Motors Corp.

Mickey Levy, chief economist at Banc of America Securities in New York, said the rise "is consistent with business efforts to trim production and labor in response to the slowdown in product demand." He said he expects "a further moderation in employment gains, which will result in a rising level and duration of unemployment."

Internet and electronic commerce businesses accounted for 8,329 of the 44,152 job cuts announced by companies last month, the employment firm Challenger, Gray & Christmas reported. The auto industry accounted for 8,306 of the announced cuts.

More layoffs can be expected. Delphi Automotive Systems Inc., the world's largest auto parts maker, has said it plans to idle more than 1,700 workers indefinitely in Michigan, New York, and Ohio starting this week. DaimlerChrysler AG had earlier announced that as many as 13,600 workers would be furloughed in Toledo and Detroit last week. Ford Motor Co. said it was halting production at North American plants.

Heavy industries shed jobs in the Midwest, according to Thursday's report. Wisconsin officials reported an increase of 16,919 people filing first-time claims Thanksgiving week. Indiana reported an increase of 1,267 claims, which were the result of layoffs in machinery, primary metals, and transportation equipment.

Many employers are still having trouble filling vacancies. Analysts expect today's Labor Department report on employment to show a 4% jobless rate for November, which would be close to the 3.9% rates in October and September that tied a 30-year low reached in April.

"Labor markets have remained tight," Federal Reserve Chairman Alan Greenspan said in a speech Tuesday. "But the recent increase in initial unemployment insurance claims and the level of insured unemployment may be an early harbinger of an easing of these conditions."

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