A whopping 542,000 people claimed unemployment benefits in the United States last week, the country's highest figure since July 1992, the Labor Department said.
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 soared to a seasonally adjusted 542,000 in the week ended November 15, the highest level since July 1992.
The weekly US jobless claims report by the Labor Department 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 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 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 Capital Markets.
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.
"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 Economics.
Shepherdson noted the leap in claims over the past few weeks was "consistent, unfortunately, with the sudden collapse in just about all the coincident data on economic activity."
The Conference Board reported separately that its forward-looking index of leading economic indicators 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.
Date created : 2008-11-20