Jobless claims surge to a 16-year high
Initial unemployment filings rise to 542,000 and the number of Americans continuing on benefits nears a 26-year high.
NEW YORK (CNNMoney.com) -- The ranks of Americans getting by on unemployment insurance are rising fast.
The U.S. Department of Labor reported Thursday that initial filings for state jobless benefits increased by 27,000 to 542,000 for the week ended Nov. 15. This marks the third time since 1992 that initial claims have exceeded 500,000.
Claims are at the highest total since the week ended July 25, 1992, when 564,000 initial claims were filed.
The Senate on Thursday voted to approve a measure, passed by the House earlier this year, that extends benefits to the unemployed. The bill allows for a seven-week extension in every state and would provide an additional 13 weeks in states with an unemployment rate of 6% or greater.
In most states, unemployment benefits can be paid for a maximum of 26 weeks.
The White House said President Bush would sign the bill. In September, Bush had threatened to veto a broader stimulus bill that included the extension of jobless benefits.
Bob Brusca, an economist at FAO Economics, said that the week's sharp uptick in claims and the fact that claims have held above 500,000 indicate the figures are in worse shape than those of the two most recent recessions of 1991 and 2001.
"The level itself is very disturbing," he said. "I would guess that the job market will get worse," Brusca said.
House Speaker Nancy Pelosi said in a statement Thursday that she was pleased that Bush said he would extend unemployment benefits, but pushed the president and Senate Republicans to pass the stimulus plan the House approved in September.
Pelosi said "the depth of the nation's economic problems demands additional action," according to a statement.
Economists surveyed by Briefing.com expected 503,000 claims. Last year, the figure stood at 333,000.
The number of people continuing to collect benefits for one week or more neared a 26-year high. The number surged by 109,000 to 4,012,000 for the week ended Nov. 8, the most recent data available. The last time the figure was this high was for the week of Dec. 12, 1982, when it reached 4,381,000.
The four-week moving average of unemployment claims, used to smooth fluctuations in the data, increased by 15,750 to 506,500 from 490,750 the week prior. During the past two recessions the four-week moving average has held above 400,000. This is the 18th week the four-week moving average has exceeded that benchmark.
U.S. job losses have been mounting for months. Earlier this month, the Labor Department reported the economy lost 240,000 jobs in October, bringing the total number of jobs shed in 2008 to nearly 1.2 million. The unemployment rate rose to 6.5%, a 14-year high, last month.
Companies reporting layoffs in past week include Citigroup (C, Fortune 500), which slashed 20% of its workforce, or 50,000 jobs, the biggest cut by a corporation in 15 years. Financial services firm Fidelity Investments announced that it will cut 1,700 jobs, and Sun Microsystems (JAVA, Fortune 500) reported that it would lay off 6,000 people, or 18% of its work force.