Jobless claims down from 16-year high
Initial unemployment filings fall more than expected to 529,000, but remain above historically high half-million mark.
NEW YORK (CNNMoney.com) -- The number of Americans filing new unemployment insurance claims edged down from a 16-year high, but remained elevated above the half-million mark.
The U.S. Department of Labor reported Wednesday that initial filings for state jobless benefits decreased by 14,000 to 529,000 for the week ended Nov. 22.
This marks the fourth time since 1992 that initial claims have exceeded 500,000. Last year at this time, jobless claims stood at 349,000.
The number of initial claims fell below the the 537,000 claims forecast by economists surveyed by Briefing.com.
Claims hit a 16-year high for the week ended Nov. 15, when 543,000 claims were reported, the highest total since July 25, 1992 when 564,000 were filed.
The four-week moving average of jobless claims, used to smooth out fluctuations in data, rose by 11,000 to 518,000. The last time the average reached that figure was in January 1983.
The number of people continuing to collect unemployment insurance for a week or longer, an indication of a tough job market, fell to 3,962,000 in the week ended Nov. 15, the latest week available, from a near 26-year high of 4,016,000 reached the week prior.
This elevated rate of jobless claims is likely to persist as employers slash jobs and slow their hiring, a result termed a "toxic combination," by Ian Shepherdson, chief U.S. economist at High Frequency Economics.
"We see nothing to suggest claims are near their peak; the trend is still strongly upwards," Shepherdson said in a statement. "At this level, we have to expect huge, sustained declines in payrolls and continued upward pressure on the unemployment rate."
Last Friday, spurred by the economic crunch, President Bush signed legislation to extend benefits by at least seven weeks in every state, and by 13 weeks in states with unemployment rates of at least 6%. In most instances, unemployment benefits last for 26 weeks.
U.S. job losses have been mounting for months, with severe cuts coming in November. At least 60,929 job cuts were announced during the week that began Nov. 17, including the 50,000 planned cuts at Citigroup. (C, Fortune 500)
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. That rate is expected to rise to 7.6% in 2009, according to a report released last week from the Federal Reserve.
In the past week, President-elect Barack Obama has outlined an economic recovery plan to save or to create 2.5 million jobs by 2011, by rebuilding the nation's roads and bridges, modernizing its schools and creating more sources of alternative energy.