Information Security & US & Life & Love & Fashion & Hacking & Passion

Microsoft and Sony will talk up their console-centric home entertainment plans in back-to-back keynotes at CES.

New jobless claims fell more than expected last week from a 16-year high, the government said Wednesday, though they remain at elevated levels due to the slowing economy.

The Labor Department reported that initial requests for unemployment benefits fell to a seasonally adjusted 529,000 from the previous week's upwardly revised figure of 543,000. That is lower than analysts' expectations of 537,000.

Despite the improved number, initial claims remain at recessionary levels. The four-week average, which smooths out fluctuations, rose to 518,000, its highest level since January 1983, when the economy was emerging from a steep recession.

The number of people continuing to claim unemployment insurance also dropped unexpectedly to 3.96 million, down from the previous week's 4.02 million, which was the highest level in 25 years. The labor market has grown by about half since 1983.

Economists consider jobless claims a timely, if volatile, sign of how fast companies are laying off workers. Employees who quit or are fired for cause are not eligible for benefits.

The economy has been hit hard in recent months by the housing slump and the broader financial crisis, which have led consumers and businesses to cut back on spending.

Higher unemployment could lead to a downward spiral, as laid-off workers are more likely to fall behind on mortgage payments and other debt. Those who remain employed also may become more conservative in their spending.

American Express Co. is seeking $3.5 billion in funds under the government's plan to directly invest in financial firms, according to a Wednesday report in The Wall Street Journal citing unnamed sources.

Earlier this week, American Express (nyse: AXP - news - people ) received approval from the Federal Reserve to become a bank holding company, which is a similar structure to traditional commercial banks. The credit card company now has access to financing from the Fed and the ability to grow a large deposit base.

The increased funding opportunities through government programs, including the potential $3.5 billion investment, could be a huge boost to American Express as one of its primary sources of funding has nearly disappeared amid the ongoing credit crisis.

American Express relied on packaging pools of credit card debt and selling them to investors in the securitization market. As investors have shied away from purchasing all but the safest forms of debt, the market for credit card-backed securities has dwindled.

American Express is also facing a slowdown in the broader economy, which has led to more customers missing payments and cutting back on spending, hurting the company's profitability.

Third-quarter profit at American Express fell 24 percent to $815 million, or 70 cents a share, the company said last month. The card company took a $1.36 billion provision for loan losses, 51 percent higher than the year-ago quarter.

The $3.5 billion from the government could help alleviate some of the company's funding problem and help bolster reserves to protect against future losses.