Jobless Claims Jump 669,000; Total At 5.7M
As President Barack Obama met in London with Group of 20 leaders to tackle the global economic crisis, more negative data poured in regarding U.S. unemployment.
The number of people filing new jobless claims jumped unexpectedly last week, while those continuing to receive benefits hit a 10th straight record-high. Both figures show the labor market remains weak and is unlikely to recover anytime soon.
The Labor Department said Thursday that initial claims for unemployment insurance rose to a seasonally adjusted 669,000 from the previous week's revised figure of 657,000. That total was above analysts' expectations and the highest in more than 26 years, though the work force has grown by about half since then.
The tally of laid-off workers claiming benefits for more than a week rose 161,000 to 5.73 million, setting a record for the 10th straight week. That also was above analysts' expectations and indicates that unemployed workers are having difficulty finding new jobs.
As a proportion of the work force, the number of people on the jobless benefit rolls is the highest since May 1983.
Employers are eliminating jobs and taking other cost-cutting measures to deal with sharp reductions in consumer and business spending. The current recession, now in its 17th month, is the longest since World War II.
The jobless claims data come a day before the department is expected to issue another dismal monthly employment report. Economists forecast that report will show employers cut 654,000 jobs in March, while the unemployment rate increased to 8.5 percent from 8.1 percent.
Companies cut their payrolls by 651,000 jobs in February, a record third straight month of job losses above 600,000.
A private survey Wednesday said businesses cut 742,000 jobs in March. Employment at medium- and small-sized companies fell the sharpest - by a combined 614,000. The rest of the job cuts came from big firms - those with 500 or more workers according to the report from Automatic Data Processing Inc. and Macroeconomic Advisers LLC.
Elsewhere, healthcare products distributor Cardinal Health Inc. said it would lay off 1,300 employees, or about 3 percent of its work force, and semiconductor equipment maker KLA-Tencor Corp. said it will cut about 600 jobs, or 10 percent of its employees.
The Federal Reserve has cut a key benchmark interest rate to nearly zero in an effort to jump-start lending and embarked on a series of radical programs to inject billions of dollars into the financial system.
The Obama administration's $787 billion stimulus package, approved by Congress in February, is trying to counter the recession by providing money for public works projects, extending unemployment benefits and helping states avoid budget cuts.