Jobless claims surge
Number of Americans filing for unemployment benefits breaks half-million mark for first time in 2009.
NEW YORK (CNNMoney.com) -- The number of Americans filing for first-time unemployment benefits rose more than expected last week to 524,000, breaking the half-million mark for the first time in 2009, according to a government report released Thursday.
The Labor Department said that initial filings for state jobless benefits rose 54,000 for the week ended Jan. 10.
Economists polled by Briefing.com expected the reading to rise to 501,000 claims.
Jobless claims were revised upward to 470,000 from 467,000 for the week ended Jan. 3.
The last time jobless claims exceeded the half-million mark was the week that ended Dec. 20, when claims surged to a 26-year high of 589,000.
Ian Shepherdson, an economist with High Frequency Economics in New York, said that the impact of the Christmas and New Year's Day holidays continue to cloud the data of the weekly report.
However, he thinks that that jobless claims will rise and he doubts that the peak in claims will be reached before fall.
"The weekly numbers are always volatile, but we think a peak above 750,000 is a reasonable, if very depressing, expectation," Shepherdson wrote in a research note.
Joshua Shapiro, an economist at Maria Fiorini Ramirez Inc., said the data should begin to show the direction of the job market by early next month. But he said the report, despite the seasonal volatility, points to more hard times.
"Both initial and continuing claims point to a significant rate of deterioration in labor market conditions," Shapiro said in a statement.
A four-week average of new unemployment claims fell by 8,000, to an average of 518,500 a week from 526,500 the week prior.
The four-week moving average is designed to smooth out some of the week-by-week fluctuations, and give a broader view of the U.S. job market.
The number of people continuing to collect unemployment insurance for one week or more fell by 115,000 to 4.49 million in the week ended Jan. 3, the most recent data available.
Over the previous four weeks, the number of people on unemployment for one week or more increased by 27,500 to an average of 4.49 million a week, the government said.
The greatest number of layoffs were reported in New York, North Carolina, Georgia and South Carolina.
Many economists believe that in order to create demand for goods and services, the government needs to revamp the economy with stimulus and deficit spending.
President-elect Barack Obama is trying to gain support for his plan to save or create 3 to 4 million jobs by the end of 2010.