A pair of government reports Thursday provided further evidence that the economy, in recession for more than a year, is still contracting.

Initial jobless claims for the week ending Jan. 10 rose by 54,000 from the pervious week to 524,000, the Labor Department reported. There were nearly 4.5 million workers collecting unemployment benefits, a drop of 115,000.

Separately, the Labor Department reported that its producer price index for finished goods dropped 1.9% in December, following a 2.2% decline in November and a 2.8% drop in October. Minus the indices for food and energy (core PPI), wholesale prices crept up 0.2%.

The overall decrease was driven by a 9.3% decline in the energy index in December, following an 11.2% drop in November. Prices for consumer foods moved down 1.5%.

For all of 2008, the PPI was down 0.9%, its biggest drop since 2001.