Jobless Claims Soar Unexpectedly

(CBS/AP)  New claims for unemployment benefits jumped last week to a 16-year high, the Labor Department said Thursday, providing more evidence of a rapidly weakening job market expected to get even worse next year.

The government said new applications for jobless benefits rose to a seasonally adjusted 542,000 from a downwardly revised figure of 515,000 in the previous week. That's much higher than Wall Street economists' expectations of 505,000, according to a survey by Thomson Reuters.

That is also the highest level of claims since July 1992, the department said, when the U.S. economy was coming out of a recession.

The four-week average of claims, which smooths out fluctuations, was even worse: it rose to 506,500, the highest in more than 25 years.

In addition, the number of people continuing to claim unemployment insurance rose sharply for the third straight week to more than 4 million, the highest since December 1982, when the economy was in a painful recession.

Those figures partly reflect growth in the labor force, which has increased by about half since the early 1980s.

The figures likely will cause some economists to increase their projections for the unemployment rate this year. Many already expect unemployment to reach 7 percent by early next year and 8 percent by the end of 2009.

The rate in October was 6.5 percent, and last year the rate averaged 4.6 percent.

The Federal Reserve on Wednesday released projections that the jobless rate will climb to between 7.1 percent and 7.6 percent next year, according to documents from the Fed's Oct. 29 closed-door deliberations on interest rate policy.

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.

Economists consider jobless claims a timely, if volatile, indication of how rapidly companies are laying off workers. Employees who quit or are fired for cause are not eligible for benefits.

Several companies announced mass layoffs in the past week, including Citigroup Inc., Union Pacific Corp. and Sun Microsystems Inc.

European stock markets fell, then recovered some lost ground Thursday on expectations Wall Street will not repeat the heavy sell-off from the day before. Asian markets closed sharply down.

The FTSE 100 index of leading British shares was down 49.34 points, or 1.2 percent, at 3,956.34, while Germany's DAX was 50.87 points, or 1.2 percent, lower at 4,303.22. The CAC-40 in France was 58.61 points, or 1.9 percent, lower at 3,029.28.

The losses in Europe were dwarfed by the selling in Asian markets earlier, which came in the immediate aftermath of the steep 427 point, or 5.1 percent, decline in the Dow Jones index of leading U.S. shares on Wednesday. The broader Standard & Poor's 500 index slid 6.1 percent to 806.58. Both closed at their lowest levels since March 2003.

[pcreversed]

Unexpectedly unemployment claims jump??? I guess the sun coming up this morning was unexpected to them also.

[armydog2]

They didn''t expect this, what kind of happy drugs are they taking.

[beach671]

"""The unemployment rate during The Great Depression averaged 25%. Our current unemployment rate will probably take off in that direction very soon. Maybe pass 25%."""

They counted the unemployed differently way back in the Great Depression. Today they only count those claiming unemployment benefits. Not eligible or already used up your benefits and you are no longer counted.

Our unemployment numbers may indeed exceed the Great Depression. Nobody knows. We''re $11 Trillion in the hole folks. Bush was correct in saying we can''t afford to extend unemployment benefits. We can''t.

Emergency action must be taken. Legislation to immediately unlock all 401k''s and the Federal TSP Plan to allow all to withdraw their funds now, taxed at 30%.

We need tariffs put on Chinese imports to cover food inspections as we all know it''s contaminated. Other countries have stopped importing Chinese products all together. They can''t figure out how to even recall those 60 million faulty chinese valve stems Americans have on their cars now. We need to start steering away from China and go to South America instead for goods.

[gmancubfan]

...and what do we get out of the numbskull currently sitting in the oval office? He threatens to veto an extension of unemployment insurance for those whose benefits are running out because it is "wasteful spending". However, he had no problem helping AIG, Fannie Mae by urging Congress to hand over $750 billion to the Treasury Secretary to dole out as he sees fit. The sooner this guy leaves office the better for all of us except of course those fatcat clowns in their lear jets and multimillion dollar parachute arrangements.

[nomorekidds]

The unemployment rate during The Great Depression averaged 25%. Our current unemployment rate will probably take off in that direction very soon. Maybe pass 25%. We''ll all have to barricade ourselves in our homes with our food and guns and hope that things somehow get better.

[httpwwwnews]

Raise import taxes on everything manufactured outside our country so high that it''s cheaper to manufacture here. That will put people back to work and get rid of the cheap dangerous products from China.

[terrapin78]

I believe that letting the Auto Cos go under will weaken our NATIONAL SECURITY.

That is the main reason I am in favor of helping them with $$$$.

[ddaryl1]

Guess who was the president 16 years ago... George Bush Senior. Following 8 years od Reagan policies.

here we are once again in the 8th year of George Bush Jr.''s republican policies and look at the mess this country is in.

This what people get for supporting Republican economic idealogies that reward the already wealthy... We were in debt up to our eye balls...

Then came Bill Clinton and things were good again, we were in the black with the national debt and low unemployment etc...

... and then GWB and we are trillions in bedt and the worse financial disadter since the great depression era...

their is but one common denominator here. REPUBLICAN PRESIDENTS

4 recessions since the 1980s all under Republican presidents. Each who grew governemnbt larger isntead of what they campaigned with, and people bought it hook line and sinker.

Rebublicans are very evil

but hey I''m sure these guilt ridden rich folk will send their butlers down to the soup line for all of us...

[bacallabah]

this is all due to ilegall immigrants employers are not hiring americans anymore lawn care/landscapers construction carpentry and building jobs are all suffering even if people can find work they cannot afford to live when lanlords jack up rents taking advantage of a situation knowing 20 mexicans will move in for 2200 + utils and a family of 5 cannot come near that..how many people right now would love to even pick fruits let alone get back to manual labor like myself you have people like myself who know nothing but and are now having to collect unemployment and enrolling in colleges to be retrained in new work and guess what the govt pays for the schooling as well as the unemployment wouldnt it be cheaper to just toss them all out and keep the rules and penalties harsh..there was a situation here where an ilegall killed a 8 month old child if the govt did there jobs that child would be here now

[ddaryl1]

Guess who was the president 16 years ago... George Bush Senior. Following 8 years od Reagan policies.

here we are once again in the 8th year of George Bush Jr.''s republican policies and look at the mess this country is in.

This what people get for supporting Republican economic idealogies that reward the already wealthy... We were in debt up to our eye balls...

Then came Bill Clinton and things were good again, we were in the black with the national debt and low unemployment etc...

... and then GWB and we are trillions in bedt and the wordse financial disadter since the great depression era...

their is but one common denominator here. REPUBLICAN PRESIDENTS

4 recessions since the 1980s all under Republican presidents. Each who grew governemnbt larger isntead of what they campaigned with, and people bought it hook line and sinker.

Rebublicans are very evil

but hey I''m sure these guilt ridden rich folk will send their butlers down to the soup line for all of us...