Business in brief: U.S. unemployment at 2-year high

The number of new people signing up for unemployment benefits last week shot to the highest level in more than two years, fresh evidence of the damage to a national economy clobbered by housing, credit and financial crises.

The Labor Department reported Thursday that new applications filed for unemployment insurance jumped by a seasonally adjusted 38,000 to 407,000 for the week ending March 29. The increase left claims at their highest point since Sept. 17, 2005, following the blows of the devastating Gulf Coast hurricanes.

“This report supports the view that the jobs market is deteriorating toward recessionary conditions,” said T.J. Marta, a fixed-income strategist at RBC Capital Markets.

The latest snapshot of labor activity was worse than economists had anticipated. They had predicted claims would be much lower, about 365,000.

Meanwhile, the number of people continuing to collect unemployment benefits rose by a sharp 97,000 to 2.94 million for the week ending March 22, the most recent period for which that information is available. That was the highest since July 17, 2004.

– Associated Press

Companies borrow more Fed funds

Big Wall Street investment companies are stepping up their borrowing a bit from the Federal Reserve’s unprecedented emergency lending program.

The Federal Reserve reported Thursday that those firms averaged $38.1 billion in daily borrowing over the past week from the new lending program. That compared with $32.9 billion in the previous week and $13.4 billion in the first week the lending facility opened.

The program, which began March 17, is part of the Fed’s effort to aid the financial system.

The Fed, for the first time, agreed to let big investment houses temporarily get emergency loans directly from the central bank. This mechanism, similar to one available to commercial banks for years, will continue for at least six months. It was the broadest use of the Fed’s lending authority since the 1930s.

– Associated Press

CARACAS, Venezuela

Legislature increases crude oil taxes

Venezuela moved to take a greater cut from high oil prices Thursday when the legislature gave initial approval to a bill setting taxes as high as 60 percent on profits from increases in crude prices.

“Sudden profits” made by foreign oil companies would be taxed at 50 percent when the average monthly price for benchmark Brent crude exceeds $70 a barrel, according to the bill that passed its first reading in Venezuela’s National Assembly.

An average Brent price of $100 would trigger taxes of 60 percent.

The bill said the Energy Ministry would lay out the mechanism for calculating the tax, which would be based on the difference between the trigger price and actual sale price. Heavy Venezuelan crude generally sells for less than light Brent oil from the North Sea.

Companies would be able to deduct the new taxes from their regular income taxes, which are currently set at 50 percent.

Ruling party lawmaker Angel Rodriguez told Venezuela’s state-run news agency the tax was justified because “oil companies have excessive earnings that go beyond reasonable levels of profit.” He said they are generated by increasing demand for petroleum on world markets rather than by investments.

The bill would not take effect until it is approved a second time by the National Assembly, which is controlled by allies of President Hugo Chavez. Final approval could come next week.

The legislation would broaden state control over foreign oil companies operating in Venezuela – home to the largest petroleum deposits in the Western Hemisphere.

– Associated Press