The number of laid-off workers filing claims for unemployment benefits showed an unexpected upswing last week although another of the key indicators of unemployment hit a four-year high.  The Labor Department reported Thursday that applications for unemployment benefits totaled 357,000 last week, some 18,000 fewer than the previous week. That pushed applications for benefits to their lowest level since mid-April.

However, the four-week average for people receiving benefits edged up to 3.086 million, the highest level since March 6, 2004, when the country was still struggling to recover from a prolonged period of rising unemployment. The increase in so-called continuing claims underscored the problems people are facing with rising layoffs and the difficulty in finding new jobs in a weak economy. Some analysts said the better-than-expected showing was an aberration that reflected problems the government has in adjusting the claims figures around holidays. Last week covered the Memorial Day holiday when state claims offices were closed.

The unemployment report for May will be released on Friday. Analysts are expecting that the overall civilian jobless rate will edge up to 5.1 percent, compared to 5 percent in April, and that businesses will have cut 60,000 jobs, marking the fifth straight month of job losses. This long stretch of job cuts has many economists believing the country has fallen into a recession. However, the overall economy as measured by the gross domestic product has managed to remain in positive territory with the GDP growing at an annual rate of 0.9 percent in the first three months of the year.

In other economic news, reports from major chain stores showed that consumers stepped up their shopping in May after tax rebate checks started appearing in mailboxes. Discount and lower-priced stores such as Costco Wholesale Corp and Wal-Mart Stores Inc. were among the strongest performers. The Bush administration is hoping that the $168 billion economic stimulus program which is mailing checks to some 130 million households and showering businesses with tax breaks will be enough to jump-start the economy and result in stronger growth in coming months.

The drop of 18,000 jobless claims applications last week was much better than the unchanged performance that economists had been expecting. For the week ending May 24, a total of 31 states and territories reported that claims had declined, while 22 reported increases. The states with the biggest increases were Ohio, up 2,390, because of higher layoffs in the auto, transportation and service industries, and Mississippi, with a rise of 2,028, reflecting higher layoffs in the auto industry.

The states with the biggest declines were Michigan, with a drop of 1,880, reflecting fewer layoffs in the auto industry in that state, and Pennsylvania, with a drop of 1,120, reflecting fewer layoffs in petroleum, primary metals and the furniture industry. I wonder when the job market will begin to feel the full brunt of this recession?

A global market meltdown and a decelerating economy could shake the steel nerves of the European Central Bank, analysts said Tuesday, as more observers are predicting it will cut borrowing costs as soon as the second quarter of this year.

The ECB has kept its benchmark interest rate on hold at 4 percent since last June _ before August’s credit crisis froze bank lending and threatened to stall major economies.

Its refusal to cut rates _ and encourage reluctant banks to give credit to each other, to companies and to homebuyers _ stood in stark contrast to the U.S. Federal Reserve which in a surprise move Tuesday reduced its rate for the fourth time since last September.

The Fed slashed its benchmark refinancing rate to 3.5 percent from 4.25 percent as stock markets dropped sharply Monday on investor skepticism that the U.S. government’s multibillion-dollar (-euro) tax relief plan could save the U.S. from a possible slide into recession.

But, until recently, ECB President Jean-Claude Trichet has talked instead about raising rates as the 15 nations that share the euro saw inflation spiral in the last two months to match an all-time high.

Here is a round-up of some of the most popular finance news items around the world.

-By keeping your car for 15 years, or 225,000 miles of driving, you could save nearly $31,000, according to Consumer Reports magazine. That’s compared to the cost of buying an identical model every five years, which is roughly the rate at which most car owners trade in their vehicles. A pretty good idea but the car manufacturers won’t like it.

-General Motors has quietly dropped a marketing strategy it announced in May where it would bring other automakers’ vehicles to its Chevrolet showrooms for customers to test against its redesigned 2008 Malibu. The company was already running a similar program for its new Saturn Aura sedan - where dealers were bringing Honda Accords and Toyota Camrys into the showroom and allowing customers to inspect and test those vehicles in comparison to the Aura.

-President Bush outlined his plan Friday for helping troubled subprime borrowers keep their homes. The proposals put forward by the president included increasing the help offered by the Federal Housing Authority to troubled borrowers. That may take the form of expanding the pool of borrowers who can apply to the FHA to refinance their loans.

-Christine Lagarde, the first woman finance minister for a G-8 nation, was rated the best minister in President Nicolas Sarkozy’s government last month by one of France’s top-selling newspapers. Great news, keep up the good work.