Jobless claims: Highest since Katrina
Labor Department says number of claims surges to 407,000 - the highest level since September 2005.
NEW YORK (CNNMoney.com) -- New filings for unemployment claims surged in the latest week to the highest level since September 2005, according to a government report released Thursday.
The Labor Department said applications for unemployment benefits rose to 407,000 in the week ended March 29, up from a revised 369,000 claims in the previous week.
The last time claims were this high was in the week ended Sept. 17, 2005, just after Hurricane Katrina hit the Gulf Coast.
A consensus of economists polled by Briefing.com had expected initial jobless claims to fall to 365,000 from the originally reported 366,000.
"There has been a slow deterioration in the labor market," Paul Kasriel, chief economist with Northern Trust, said. "We're starting to see a speed-up in this deterioration," he added.
The surge in jobless claims comes a day before the government's closely watched March employment report. Economists surveyed by Briefing.com expect that report to show a decline of 50,000 jobs.
The job market has suffered from the deepening economic slump. On Wednesday, Federal Reserve Chairman Ben Bernanke told Congress that a "recession is possible," and that the economy could contract over the first half of the year.
The Labor Department said over the past four weeks, a running average of 374,500 people filed new claims per week, up 4.4% from the previous week's revised average of 358,750. In the year-ago period, the average was at 311,750.
"There's been a steady increase in claims which is consistent with a slowing economy," said Michelle Meyer, economist with Lehman Brothers.
Continuing claims for those already receiving benefits rose to 2.9 million in the week ended March 22, the most recent week available. That's up from a revised 2.8 million reported for the prior week, matching the four-week average.
New jobless claims in Pennsylvania increased the most in the week ended March 22, the report showed. Michigan saw the biggest drop, with first-time claims falling 7,660 due to fewer layoffs in the automotive industry.