Initial unemployment claims up
Number of Americans seeking unemployment insurance climbs to 478,000.
NEW YORK (CNNMoney.com) -- The number of out-of-work Americans filing new claims for unemployment insurance rose last week, the government said Thursday, reflecting continuing weakness in the nation's economy.
The U.S. Department of Labor reported that initial filings for state jobless benefits increased by 15,000 to a seasonally adjusted 478,000 in the week ended Oct. 18. That's a 44% increase from last year, when it stood at 333,000.
The effects of Hurricane Ike in Texas added roughly 12,000 claims to the total, the department reported.
For the week prior, initial claims were revised up by 2,000 to 463,000.
Economists surveyed by Briefing.com expected the number to rise to 465,000.
The economy is in a recession and the job market will continue to worsen, according to Peter Cardillo, economist at Avalon Partners, a New York investment firm.
"They're alarming numbers, and until year end we'll see the results of massive layoffs hit the economy in a big way, in a way not seen since the end of the tech bubble in terms of unemployment," Cardillo said.
The four-week average of jobless claims, which smoothes out fluctuations, fell to 480,250 from the week before. A level of more than 400,000 was present throughout the last two recessions. A year ago, the average was 327,750.
The number of American workers collecting benefits for more than one week decreased to 3.72 million in the week ended Oct. 11, the most recent data available, from the prior week. The 4-week moving average increased to 3.68 million, an increase of 44% from the 2.55 million average reported last year.
Three weeks prior, unemployment claims spiked to 499,000, the highest level recorded since the 517,000 claims filed in the wake of the Sept. 11 terrorist attacks.
This week, Yahoo said it plans to cut 1,500 jobs, drug maker Merck said it will slash 7,200 jobs and auto manufacturer Chrysler announced it would lay off 825 workers and close a plant earlier than expected.
New York and Florida reported increases in layoffs in the construction and service industries, and there was a surge in unemployment in Michigan's auto industry.
Earlier this month, Labor Department reported net payroll nationwide declined by 159,000 in September, the ninth straight month the economy lost jobs. Nationwide, the unemployment rate stands at 6.1%.