Weekly Jobless Claims Jump to 26-Year High
Washington Post
By Howard Schneider and Annys Shin
Washington Post Staff Writers
Thursday, December 11, 2008; 12:22 PM

The number of people filing for unemployment benefits for the first time jumped to a 26-year high last week, while demand for U.S. goods and services tumbled in October, providing more evidence that the recession is accelerating.

Initial unemployment claims for the week ending Dec. 6 increased 58,000 to 573,000, a level not seen since Nov. 1982, the Labor Department reported today. A four-week average of jobless claims -- which is considered a more reliable measure of the labor market -- also hit a 26-year high, rising to 540,500 from 526,250.

The increase was higher than many analysts had predicted.

A separate report released from the Commerce Department today showed that total U.S. exports in October fell more than 2 percent, from $155 billion to $151 billion, the third monthly decline in the value of goods and services that U.S. companies sell abroad.

Buoyed by a decline in the value of the dollar, exports had ballooned over the past two years, from $115 billion at the beginning of 2006 to $168 billion as of July. Exports have provided a particularly important support for U.S. manufacturers as the price of their products became more competitive with other companies around the world.

But the boom seems to be over. The drop in October exports hit not just manufacturers, but the country's service sector companies as well, and spread across a broad variety of businesses.

The downturn in U.S. exports tracks a world economic decline reflected in other new data released in recent days.

In Paris this morning, the International Energy Agency said that world oil consumption fell in 2008 for the first time in 25 years. By the end of the year, global consumption will have amounted to 85.8 million barrels per day, down about 200,000 barrels per day. Yesterday, China announced its sharpest decline in exports in seven years -- a barometer of global economic weakness from a country that has become a key supplier of manufactured products.

Efforts to rekindle demand are under discussion in national capitals worldwide.

A European Union summit underway in Brussels today and tomorrow is expected to take action on a proposed $250 billion package of programs to stimulate demand and invest in new technologies. China announced that it was increasing subsidies to farmers to encourage them to buy new machinery, Bloomberg News reported, and is scheduled to meet with the region's other two major economies -- Japan and South Korea -- in a weekend summit.

The drop in U.S. exports led to a slight increase in the nation's monthly trade deficit, which rose to $57.2 billion from $56.6 billion the month before.

Original Text