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Jobless claims surge to 26-year high

Wed Dec 24, 8:58 am ET

WASHINGTON (Reuters) � The number of U.S. workers filing new claims
for jobless benefits jumped by 30,000 to a 26-year peak last week,
government data on Wednesday showed, as the country's year-long
recession continued to chill the labor market.

Initial claims for state unemployment insurance benefits rose to a
seasonally adjusted 586,000 in the week ended Dec 20 from a revised
556,000 the prior week, the Labor Department said. It was the highest
since the week ended November 27, 1982, when initial claims rose
612,000.

Analysts polled by Reuters had forecast 560,000 new claims versus a
previously reported count of 554,000 the week before.

A Labor Department official said there were no special factors
influencing the data and no noticeable impact from severe winter
weather in northern parts of the country.

The official also said a number of states had reported increasing
layoffs in the auto industry, which has been hit hard by consumers
cutting back on their spending in the face of rising unemployment and
scarcer credit.

The four-week average of new jobless claims, a better gauge of
underlying labor trends because it irons out week-to-week volatility,
increased to 558,000 from 544,250 the week before. This was the
highest reading since December 1982.

This measure has mounted steadily as the U.S. economy suffers from a
credit crisis sparked by the housing slump, forcing lay-offs as firms
slash costs to offset weaker income.

The number of people remaining on the benefits roll after drawing an
initial week of aid declined by 17,000 to a less-then-forecast 4.370
million in the week ended December 13, the most recent week for which
data is available. Analysts had estimated so-called continued claims
would be 4.400 million.

http://news.yahoo.com/s/nm/20081224/ts_nm/us_usa_economy_jobless