Initial jobless benefit claims rise 30,000 to 586,000 in latest week
The nation's labor market continued to worsen in recent weeks, with the unemployment lines stretching to the longest in 26 years, the Labor Department reported Wednesday.
First-time applications for state unemployment benefits jumped by 30,000 to a seasonally adjusted 586,000 in the week ended Dec. 20, the government said, based on reports of actual filings at state offices around the nation. That's the highest since November 1982. Read the full report.
The four-week average of new claims -- which smooth out distortions caused by bad weather, strikes or the timing of holidays -- rose by 13,750 to 558,000, the highest since December 1982.
Meanwhile, the number of people collecting benefits fell by 17,000 to 4.37 million in the week ended Dec. 13. The four-week average of continuing claims rose by 93,000 to 4.32 million, the most since December 1982.
The jobless claims report shows businesses are laying off workers at a rapid pace, and finding a replacement job is ever harder for those who have lost their job.
"The rate of job losses has sped up to a pace consistent with forecasts for a plunge in gross domestic product during the current quarter," wrote Tony Crescenzi, chief bond strategist for Miller Tabak & Co., who noted that forecasters are predicting an annualized decline of 5% or more this quarter.
"This is a pretty clean number," a Labor Department spokesman said. There were no unusual events that would skew the numbers one way or the other, he said. The snow storm in the Northeast had little impact on new claims.
Several states reported increases in manufacturing layoffs, notably in the automotive industry, the government spokesman said. Layoffs were hitting almost every sector of manufacturing, he said. "It's crazy."
The insured unemployment rate -- the proportion of covered workers who are receiving benefits -- was steady at 3.3%, the highest in 16 years.
Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.
In November, 533,000 nonfarm payroll jobs were lost, the most in one month since 1974. The economy has shed 1.9 million jobs since the recession began in December 2007. The December payroll figures will be reported on Jan. 9.
Typically, unemployment benefits run out after 26 weeks for those who are eligible. A federal law has extended unemployment benefits for an extra 13 weeks under the separate federal program, and President Bush recently signed into law legislation providing for a further extension of benefits.
Benefits are generally available for those who lose their full-time job through no fault of their own. Those who exhaust their unemployment benefits are still counted as unemployed if they are actively looking for work.
Compared with the same week a year ago, new jobless claims are up about 62%, while continuing claims are up 63%.
In a separate report, the Commerce Department reported that inflation-adjusted consumer spending rose in November by 0.6%, the first increase since May. Consumer prices plunged 1.1%, helping to drive after-tax inflation-adjusted personal income up by 1%, despite huge job losses in the month. See full story.
Also, the Commerce Department said orders for new durable goods fell 1% in November after plunging 8.4% in October. Orders for core capital equipment goods rose 4.7%.
