Latest data shows signs of credit crunch - KLTV.com - Tyler, Longview, Jacksonville |ETX News

WASHINGTON (AP)

Latest data shows signs of credit crunch

The credit crunch is causing declines in manufacturing and the job market.

More people than expected were in the unemployment lines last week. At the same time, orders to U.S. factories fell by the largest amount in two years. The Labor Department says new applications for unemployment benefits rose to a 7-year high due to a weakening economy and the impact of Hurricanes Ike and Gustav. Initial claims for jobless benefits increased by 1,000 to a seasonally adjusted 497,000. That's the highest since just after the September 11th terrorist attacks seven years ago.

The Commerce Department says August factory orders plunged by 4% compared to July. The weakness was led by declines in orders for aircraft and autos.

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