US jobless claims hit 16-year high
US unemployment claims surged to a 16-year high, government data showed Thursday, adding to growing alarm as companies worldwide shed workers in the global economic downturn.
Initial jobless claims Initial Jobless Claims is a report issued by the U.S. Department of Labor on a weekly basis. This report tracks how many people have filed for unemployment benefits in the previous week. It is a good gauge of the U.S. job market. soared to a seasonally adjusted Seasonally adjusted
Mathematically adjusted by moderating a macroeconomic indicator (e.g., oil prices/imports) so that relative comparisons can be drawn from month to month all year. 542,000 in the week ended November 15, the highest level since July 1992.
The weekly US jobless claims report by the Labor Department The Department of Labor (DOL) administers federal labor laws for the Executive Branch of the federal government. Its mission is "to foster, promote, and develop the welfare of the wage earners of the United States, to improve their working offered more evidence the world's largest economy appeared to be sliding into a deep recession.
The large increase, well above most analysts' expectations, highlighted the troubled US labor market labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience where the unemployment rate hit a 14-year high of 6.5 percent in October.
"As far as we can tell, companies have thrown in the towel since September, and are now hunkering down Hunkering down
A term used to describe a trader selling off a big position in a stock. for a deep and extended recession," said Ian Shepherdson, chief US economist at High Frequency Economics.
"With retail sales collapsing, industrial production plunging, export orders off a cliff and commercial property just starting what will be a very steep downturn, there is nowhere to hide."
Analysts noted the large increase in a week surveyed for the November payrolls report, due December 5, implied the jobless rate would jump significantly.
"This is obviously bad news and given that it also covers the survey week, well, we're bracing for a really bad November payroll figure," said Jennifer Lee of BMO BMO Bank of Montreal (Canada)
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The Federal Reserve has said the jobless rate could climb to 7.6 percent in 2009 as the economy struggles with a sharp downturn and a global financial crisis.
The Fed on Wednesday officially raised the specter of recession in slashing its 2009 growth forecasts to a range of growth as much as 1.1 percent or contraction by 0.2 percent.
"The labor market continues to deteriorate. The rise in initial claims indicates that firms are stepping up the pace of layoffs," said Gary Bigg, analyst at Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. .
"The increase in continuing claims -- to a level last seen in 1982 -- signals that firms are not hiring," he said.
The White House said President George W. Bush would sign a new extension of unemployment benefits if Congress approved the measure.
"The president believes it would be appropriate to further extend unemployment benefits, and he would sign the legislation now pending in Congress," spokeswoman Dana Perino said in a statement.
On a four-week moving average, a number considered a more reliable indicator of the labor market, new jobless claims rose from 490,750 to 506,500, a level last seen in January 1983.
The Labor Department said 4.012 million people were receiving unemployment benefits, the highest number since December 1982.
"The rise in continuing claims in this report, if sustained, points to a further increase in the unemployment rate in November," said John Ryding at RDQ RDQ Research Development and Quality
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Shepherdson noted the leap in claims over the past few weeks was "consistent, unfortunately, with the sudden collapse in just about all the coincident co·in·ci·dent
1. Occupying the same area in space or happening at the same time: a series of coincident events. See Synonyms at contemporary.
2. data on economic activity."
The Conference Board reported separately that its forward-looking index of leading economic indicators index of leading economic indicators
An index that is compiled by the Conference Board, a private-sector consulting firm. The index is designed to indicate the future direction of economic activity. declined 0.8 percent in October.
"The economy is contracting, and the pace of contraction may intensify over the next few months," said Ken Goldstein, economist at the business research firm.