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US Jobless Claims Soar While Home Prices Sink

Hopes that the worst might be over for the U.S. economy are fading in light of the latest data on jobs and home sales.

A report from U.S. Labor Department says initial claims for unemployment insurance jumped last week to 640,000, while the number of Americans continuing to apply for jobless benefits jumped to 6.1 million, setting a record for a 12th week in a row.

Home sales plunge

Meanwhile, an industry group says homes sales plunged three percent from February to March.

The National Association of Realtors also said Thursday that median homes prices are down 12 percent from a year ago and that about half of all homes sold belonged to owners who were having trouble paying back their home loans.

Problems in the U.S. housing market played a key role in sparking the recession that has spread around the world, and the sector has been hurt as more Americans lose their jobs.

Earlier this month, the Labor Department said the U.S. economy shed 663,000 jobs in March, sending the unemployment rate to 8.5 percent.

Officials also cautioned that millions of American workers who want or need full time jobs are able to find only part-time employment.

Stock market reacts

The release of data on jobless claims and home sales sent U.S. stock indexes lower in Thursday's mid-morning trading.

A government report by the Federal Housing Finance Agency Wednesday showed home prices edged higher in February, which some investors saw as a sign that the hard-hit housing sector may be starting to improve.

Some information for this report was provided by AP.