How is this "good"??

WASHINGTON - The number of newly laid off people signing up for jobless benefits rose last week, suggesting that employment conditions, while softening a tad, still remain good.

The Labor Department reported Thursday that new applications filed for unemployment insurance increased by a seasonally adjusted 7,000 to 316,000 for the week ending Aug. 4. The increase left claims at their highest point since late June.

Economists were predicting claims would be lower, around 310,000 for last week.

Still, claims are lower now than they were a year ago, when they stood at 319,000.

In other economic news, the back-to-school shopping season had a disappointing start in July as people turned cautious amid turmoil on Wall Street, harder-to-get credit and the worsening housing slump.

Merchants reported sluggish monthly sales results, with the weakest performers being mall-based apparel chains, particularly teen merchants like Pacific Sunwear of California Inc. and Wet Seal Inc. Wal-Mart Stores Inc. , the nation's largest retailer, posted a slim gain but warned that its increased discounting is hurting profit margins.

Consumer spending is a major shaper of overall economic activity. Individuals tightened their belts in the second quarter and are expected to be subdued through the current July-to-September period, analysts said.

Stocks plunged as fresh credit fears overwhelmed investors. The Dow Jones industrial tumbled narly 172 points in morning trading.

On the labor market front, other recent barometers suggest some cooling in hiring, partly reflecting the toll of the sour housing market and struggles in the auto industry.

Last week the government reported that the nation's unemployment rate nudged up to 4.6 percent in July, a six-month high. New job creation also slowed.