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New unemployment claims in US reach 26-year high
(Agencies)
Updated: 2008-12-11 23:42 WASHINGTON – New claims for unemployment benefits reached their highest level in 26 years last week, as companies cut workers at a rapid pace.
It is also the highest reading since November 1982, though the labor force has grown by about half since then.
Still, the four-week average, which smooths out fluctuations, was a seasonally-adjusted 540,500, the highest since December 1982, when the economy was emerging from a steep recession. The number of people continuing to claim jobless benefits also jumped much more than expected, increasing by 338,000 to 4.4 million. Economists expected a small increase to 4.1 million. The figure for continuing claims lags the initial claims figure by one week. As a proportion of the work force, the number of people continuing to receive benefits is the highest since August 1992, when the U.S. was recovering from a relatively mild recession. The increase in continuing claims was the largest jump since November 1974, the department said. Economists consider jobless claims a timely, if volatile, indicator of the health of the labor markets and broader economy. Last year, initial claims were 337,000. The economy has been hit hard by the ongoing housing slump and financial crisis, which have sharply reduced household wealth as stock prices and home values have declined. Consumers and businesses have dramatically cut back their spending. The National Bureau of Economic Research said this month that the economy fell into a recession in December 2007. The Labor Department said last week that employers cut a net total of 533,000 jobs in November and the unemployment rate reached 6.7 percent, a 15-year high. A number of large U.S. employers announced layoffs this week, including Dow Chemical Co., 3M Co., Anheuser-Busch InBev, National Public Radio and the National Football League. |