Biggest wage, benefit increase in year; jobless claims way up

WASHINGTON (AP) -- Americans' wages and benefits in the first quarter took their biggest leap in a year, suggesting the slowing economy isn't hurting workers who still have jobs. However, new claims for state unemployment insurance last week hit a five-year high.

On Wall Street, stocks added to Wednesday's gains. After the first hour of trading, the Dow Jones industrial average was up 62 points and the Nasdaq index had gained 28 points.

The Labor Department reported Thursday that its employment cost index, a closely watched gauge of inflation, rose a seasonally adjusted 1.1 percent in the January-March quarter. That compared with a 0.9 percent rise in the fourth quarter of 2000.

The first-quarter advance matched many analysts' expectations and marked the largest gain since the first three months of 2000, when workers' wages and benefits rose by 1.3 percent.

In another report, the department said the number of Americans filing new claims for jobless benefits last week rose by 18,000 to a seasonally adjusted 408,000. That was the highest level since March 23, 1996.

The increase in new jobless-claims applications was bigger than many analysts expected and provides fresh evidence of how employers' appetite for labor has waned because of the weaker economy.