MW: Initial weekly jobless claims rise to 26-year high
Claims up 82% from same period in prior year
First-time applications for state unemployment benefits rose 62,000 to a seasonally adjusted 589,000 in the week ending Jan. 17, the Labor Department said Thursday.
The level of initial claims is up 82% from the same period a year ago. The last time the level was higher was in November 1982. The four-week average of new claims was unchanged at 519,250.
Meanwhile, the number of people collecting benefits in the week ending Jan. 10 rose 97,000 to 4.61 million, a level that is 72% higher than in the prior year. The four-week average of continuing claims rose 58,750 to 4.56 million -- the highest level since November 1982.
The insured unemployment rate remained at 3.4%.
Before the release, Dan Greenhaus of the equity strategy group at Miller Tabak & Co., had expected initial claims to rise, and wrote that the real "worry point" is the level of continuing claims.
"While we would like to see a pullback in weekly claims, indicating that companies have brought employment levels in line with sales and demand forecasts, the persistent rise in continuing claims shows that businesses are in no rush at all to add new workers," Greenhaus wrote in a research note prior to the data's release.
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.
Benefits are generally available for those who lose their full-time jobs through no fault of their own. Those who exhaust their unemployment benefits are still counted as unemployed if they are actively looking for work.
The labor market has been under severe strain in recent months, with the government reporting that the U.S. economy lost 524,000 jobs in December, closing out the worst year of job losses since World War II.
Almost 2.6 million jobs were lost in 2008, with 1.9 million disappearing in just the past four months.
This week's initial claims data cover the week in which the Labor Department surveys households and work places for its monthly jobs report, due out Feb. 6.
