Weekly Jobless Claims Jump To Seven-Year High

First-time claims for unemployment benefits showed a substantial increase in the week ended November 8th, according to a report released by the Labor Department on Thursday, with the increase lifting jobless claims to their highest level in over seven years.

The report showed that jobless claims rose to 516,000 from the previous week's revised figure of 484,000. Economists had expected jobless claims to come in nearly unchanged compared to the 481,000 originally reported for the previous week.

With the increase, jobless claims rose to their highest level since the weeks following the September 11th attacks. In the week ended September 29, 2001 jobless claims totaled 517,000.

The Labor Department also said that the less volatile four-week moving average rose to 491,000 from the previous week's revised average of 477,750. The increase lifted the four-week moving average to its highest level in over seventeen years.

Last Friday, the Labor Department released a separate report showing that employment fell for the tenth consecutive month in October, driving the unemployment rate up to its highest level in over fourteen years.

The report showed that non-farm payroll employment fell by 240,000 jobs in October following a revised decrease of 284,000 jobs in September. Economists had expected a drop of about 200,000 jobs compared to the decrease of 159,000 jobs originally reported for the previous month.

Continued job losses in manufacturing, construction, and several service-providing industries contributed to the bigger than expected decrease in employment.

The Labor Department also said that the unemployment rate jumped to 6.5 percent in October from an unrevised 6.1 percent in the previous month. With the increase, the unemployment rate came in above estimates of 6.3 percent and rose to its highest level since March of 1994.

With October marking the first month of the fourth quarter, the steep drop in jobs is likely to add to expectations a continued contraction in GDP during the quarter following a modest 0.3 percent contraction in the third quarter.

A recession is technically defined as two consecutive quarters of negative growth.


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Source :
1. RTTNews : Weekly Jobless Claims Jump To Seven-Year High, 11/13/2008 9:12 AM ET.