Initial claims hit highest since July 1992; continuing claims touch 4 million
WASHINGTON (MarketWatch) -- First-time filings for unemployment benefits shot up to their highest level since July 1992 last week, rising to a seasonally adjusted 542,000 to punctuate the struggling state of the U.S. labor market, government data showed Thursday.
Initial claims for state unemployment benefits rose by 27,000 to stand at 542,000 in the week ended Nov. 15, the Labor Department reported. The number was much higher than the 503,000 that had been expected by economists.
The four-week average of claims also climbed in the latest week, rising by 15,750 to 506,500, the government said. That's the highest the four-week average -- a gauge that smoothes out events like weather or strikes -- has been since January 1983.
The number of people continuing to file for benefits and the four-week average of continuing claims also hit levels not seen since the early 1980s.
For the week ended Nov. 8, continuing claims shot up by 109,000 to 4.01 million. The four-week average of those claims rose by 71,250 to 3.86 million.
The insured unemployment rate increased to 3.0% from 2.9%.
The claims numbers, the latest gloomy indicator for the U.S. economy, come as Senate Democrats are seeking to extend unemployment insurance for workers whose benefits have expired.
The House has passed the legislation, and a Senate vote could come as early as Thursday.
The Senate bill would take 60 votes to pass. President Bush has threatened to veto the bill, saying it's fiscally irresponsible.
The Labor Department data come as Federal Reserve policy makers are expecting the economy to contract for as long as a year. There is a risk that the slowdown could persist even longer, according to edited minutes of a closed-door meeting of the Federal Open Market Committee on Oct. 28 and 29. See full story.
The FOMC now projects the unemployment rate will average between 6.3% and 6.5% at the end of this year and will average between 7.1% and 7.5% next year. Three months earlier, the FOMC had expected unemployment to remain below 6% throughout the period.
