Jobless claims jump unexpectedly to 7-year high
Yahoo News/APBy CHRISTOPHER S. RUGABER, AP Economics Writer Christopher S. Rugaber, Ap Economics Writer
November 13, 2008
WASHINGTON – The number of newly laid-off individuals seeking unemployment benefits has jumped to a seven-year high, the government said Thursday.
The Labor Department reported that jobless claims last week increased by 32,000 to a seasonally adjusted 516,000. That is the highest total since just after the Sept. 11 terrorist attacks and second-highest since 1992.
The total was much higher than analysts expected. Wall Street economists surveyed by Thomson Reuters expected claims to increase only slightly to 484,000.
The four-week average of claims, which smooths out fluctuations, rose by 13,250 to 491,000, the highest tally in over 17 years.
Thursday's figure is the first time claims have topped 500,000 during the current economic slowdown. Jobless claims above 400,000 are considered a sign of recession. A year ago, claims stood at 338,000.
The number of individuals continuing to seek unemployment benefits jumped by 65,000 to 3.9 million, above analysts' estimates of 3.85 million. That's the highest total since January 1983, though the labor market has grown by about half since then.
Initial claims have been driven higher in the past several months by a slowing economy hit by the financial crisis, and cutbacks in consumer and business spending. Claims also rose in late September due to the impact of Hurricanes Ike and Gustav, but the department said last week that the impact of the hurricanes has passed.
The rise in claims has been mirrored by an increase in the unemployment rate. Unemployment reached a 14-year high of 6.5 percent in October, the Labor Department said last week, as the ranks of the unemployed swelled to 10.1 million.
Several companies recently have announced mass layoffs, including Morgan Stanley, General Motors Corp., Ford Motor Co., and Fidelity Investments.