New Jobless Claims Jumps to 589K, Exceeding Expectations
The latest tally was well above Wall Street economists' expectations of 540,000 new claims.

AP

Thursday, January 22, 2009

The number of new claims for jobless benefits jumped more than expected last week, as companies continue to cut jobs at a furious pace.

The Labor Department reported Thursday that initial jobless benefit claims rose to a seasonally adjusted 589,000 in the week ending Jan. 17, from an upwardly revised figure of 527,000 the previous week. The latest tally was well above Wall Street economists' expectations of 540,000 new claims.

The total matches a 26-year high reached four weeks ago. The last time claims were higher was in November 1982, when the economy was emerging from a steep recession, though the work force has grown by about half since then.

The increase is partly due to a backlog of claims that piled up in recent weeks in several states that experienced computer crashes due to a crush of applications, a Labor Department analyst said.

The four-week average of claims, which smooths out fluctuations, was 519,250, the same as the previous week.

The number of people continuing to seek benefits rose by 97,000 to 4.6 million, above analysts' expectations of 4.55 million. That's also up substantially from a year ago, when 2.7 million people were continuing to receive unemployment checks.

The increase in continuing claims is an indication that many newly laid off workers are having difficulty finding new jobs.

Economists consider jobless claims a timely, if volatile, indicator of the health of the labor markets and broader economy. A year ago, initial claims stood at 324,000.

Companies from a range of sectors are hemorrhaging jobs amid a recession now in its second year. Consumers have dramatically cut back their spending, which accounts for about two-thirds of the economy, in response to declining home values and plummeting stock portfolios.

On Wednesday alone, at least four companies announced layoffs. Intel Corp. said it plans to cut up to 6,000 manufacturing jobs as the company struggles with lower demand for personal computers. United Airlines parent UAL Corp. said it would eliminate 1,000 jobs, on top of 1,500 it cut late last year. Industrial parts and systems maker Eaton Corp. said it is cutting 5,200 jobs, and airplane maker Hawker Beechcraft Corp. said it would eliminate workers after laying off 500 last year, though it didn't provide details.
Radio broadcaster Clear Channel Communications Inc., oil and gas company ConocoPhillips, and media company Time Warner Inc. also announced job cuts in the past week.http://www.foxnews.com/politics/2009/01 ... ectations/