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Applications for unemployment benefits plummeted to 368,000 last week. It was the third decline in the past four weeks. Applications are now at their lowest level since May 2008. Unemployment benefit applications peaked during the recession at 651,000. The news helped give the stock market its best day in three months. The Dow Jones industrial average rose more than 190 points, or 1.6 percent, erasing most of its losses since the unrest in Libya began. There's a big wild card for the economy -- rising prices. Prices for food around the world are at their highest levels in 20 years, and gas prices have been rising for weeks, with the average for a gallon in the U.S. nearing $3.50. For now, though, the economy is mostly flashing positive signs. Americans appear more confident about spending money, which could convince businesses that the time is right to start hiring more workers. Stores representing shopping tastes across the income spectrum reported strong sales for February, including J.C. Penney, Macy's and Saks. And the U.S. service sector, which employs about 90 percent of American workers in fields from health care to construction, is expanding at the fastest pace in more than five years, according to the Institute for Supply Management. Productivity did rise in the final three months of last year. When workers are producing at a higher level, it makes it easier for businesses to hold off on hiring.
[Associated
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