U.S. Initial Jobless Claims Rose to 667,000 Last Week
By Shobhana Chandra and Timothy R. Homan
Feb. 26 (Bloomberg) -- First-time claims for U.S. unemployment benefits unexpectedly rose last week and total benefit rolls soared to a record high, a sign companies may keep shedding jobs as the recession worsens.
First-time unemployment applications increased by 36,000 to 667,000, the highest since 1982, in the week that ended on Feb. 21 from a revised 631,000 the prior week, the Labor Department said today in Washington. The number of people staying on benefit rolls rose in the previous week by 114,000 to 5.112 million.
Job losses are crippling the consumer spending that makes up about 70 percent of the economy, threatening to prolong what may be the worst recession in the postwar era. President Barack Obama is counting on his $787 billion stimulus to help stop the slide by creating 3.5 million jobs, and on a separate plan to keep Americans struggling with mortgage costs from losing their homes.
“The labor market weakness has not found a bottom,” said Rudy Narvas, a senior economist at 4Cast Inc. in New York. “The payrolls report for February could be really bad.”
February payroll figures, due from Labor next week, may show job cuts exceeded half a million for a fourth consecutive month, according to a Bloomberg survey. The unemployment rate probably climbed to 7.9 percent, the highest level since 1984.
Already, the 3.6 million jobs lost since the U.S. recession began in December 2007 mark the biggest employment slump of any economic contraction in the postwar period.
Another report today showed orders for U.S. durable goods fell for a record sixth consecutive month in January. The 5.2 percent drop was more than twice as large as projected and followed a 4.6 percent drop the prior month, the Commerce Department said in Washington. Comparable data began in 1992. Excluding transportation equipment, orders fell 2.5 percent.
First-time jobless claims were estimated to have fallen to 625,000 from the 627,000 initially reported for the prior week, according to the median projection of 40 economists in a Bloomberg News survey. Estimates ranged from 600,000 to 700,000.
The four-week moving average of initial claims, a less volatile measure, rose to 639,000 from 620,000, today’s report showed.
The number of people staying on benefit rolls rose more than expected. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, increased to 3.8 percent, the highest since 1983, from 3.7 percent in the week ended Feb. 14. Six states and territories reported an increase in new claims for that same period, while 47 reported a decrease.
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