627K new jobless claims; continuing claims near 5 million
Washington (AP) — The number of laid-off workers receiving unemployment benefits has jumped to an all-time high near 5 million while new jobless claims remain well above 600,000. Both figures were worse than expected and new projections from the Federal Reserve show unemployment rising for the rest of this year.
The Labor Department reported Thursday that the number of people receiving regular unemployment benefits rose 170,000 to 4.99 million for the week ending Feb. 7, marking the fourth straight week those receiving benefits have been at a record level on data going back to 1967.
The continuing claims figure also was significantly above the year-ago level of 2.77 million and underscored the difficulty people are having in this recession finding another job once they are laid off.
An additional 1.5 million people are receiving benefits under an extended unemployment compensation program approved by Congress last year, bringing the total number of people receiving unemployment benefits to 6.54 million for the week ending Feb. 7.
In other economic news, wholesale inflation surged unexpectedly in January, according to the Labor Department. Wholesale prices jumped 0.8 percent last month, the biggest gain since July and well above the 0.2 percent increase that economists expected.
The acceleration was led by a 3.7 percent surge in energy prices with gasoline prices jumping 15 percent, the biggest gain in 14 months. Even outside the volatile food and energy sectors, wholesale prices showed a bigger-than-expected increase, rising by 0.4 percent.
New applications for unemployment benefits totaled 627,000 last week, the same as the previous week, according to the department. But that was still more than the 620,000 claims economists expected.
It also remained near the 631,000 claims filed three weeks ago, which was the highest tally since October 1982, when the economy was emerging from a steep recession, though the labor force has grown by about half since then. A year ago, initial claims stood at 342,000.
The four-week average for claims rose to 619,000 last week, up from 608,500 the previous week which was the first time the figure had topped 600,000 during the economic downturn.
The cascade of layoff notices in recent weeks has heightened concerns about the current recession, already the longest in a quarter-century.
Goodyear Tire & Rubber Co., said Wednesday it will cut nearly 5,000 jobs, or almost 7 percent of the biggest U.S. tire maker's work force, this year after it posted a fourth-quarter loss and revenue sank 21 percent. The cuts follow the elimination of about 4,000 jobs in the second half of last year.
General Motors Corp. and Chrysler on Tuesday filed plans with the government more than doubling their request for aid to a total of $39 billion and announced plans for thousands more job cuts. GM alone said it would cut 47,000 jobs globally by the end of the year - 19 percent of its work force, and Chrysler said it will cut 3,000 more jobs.
The Fed released a new economic forecast on Wednesday that reduced its growth forecast for 2009 and increased its unemployment rate projections. The new forecast predicts that unemployment will hit between 8.5 and 8.8 percent this year, up from the current level of 7.6 percent.
And in an appearance at the National Press Club, Fed Chairman Ben Bernanke said Wednesday that "strong and aggressive action" would be able to overcome the current recession and jolt the economy back into growth. But he said "if we fail ... then the situation will continue to deteriorate."
President Barack Obama pointed to the deteriorating economy to win quick passage of an $787 billion economic stimulus program which he signed into law this week. On Wednesday, Obama unveiled a $75 billion program aimed at halting the surging level of mortgage foreclosures in the wake of the worst slump in housing in decades.
For the week ending Feb. 7, the states with the largest increases in jobless applications were Kentucky and Arkansas, which blamed the jumps on rising layoffs in the mining, trade and manufacturing industries. The biggest decreases were recorded in California and Tennessee, which reported fewer layoffs in the construction, trade, service and manufacturing industries. (Copyright 2009 by The Associated Press. All Rights Reserved.)