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Jobless numbers worse than expected

February 20, 2009|Associated Press

WASHINGTON — 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 that ended Feb. 7, marking the fourth straight week that the number of people receiving benefits has 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 receiving unemployment benefits to 6.54 million for the week that ended Feb. 7.

"The labor market is in disarray," said Mark Zandi, chief economist at Moody's Economy.com. It's possible that job losses for all of February could total between 700,000 and 750,000 based on weekly claims so far this month, he added.

Employers slashed a net 598,000 jobs in January, the most since 1974.

In other economic news, wholesale inflation surged unexpectedly in January, according to the Labor Department. Wholesale prices jumped 0.8% last month, the biggest gain since July and well above the 0.2% increase that economists expected.

The acceleration was led by a 3.7% surge in energy prices with gasoline jumping 15%, the biggest gain in 14 months. Even outside the volatile food and energy sectors, wholesale prices showed a bigger-than-expected increase, rising 0.4%.

The New York-based Conference Board said its January index of leading economic indicators rose 0.4%, the second straight monthly gain. Economists expected no change in the index, which forecasts economic activity for the next three to six months based on 10 components, including stock prices, building permits and initial claims for unemployment benefits.

The Conference Board said the biggest boost to the index was the real money supply. The government's effort to address the credit crisis has put more money in circulation. Unemployment claims and building permits were among the biggest drags.

New applications for unemployment benefits totaled 627,000 last week, the same as the previous week, according to the Labor Department. But that was more than the 620,000 claims economists expected.

It also was close to 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. The labor force has grown by about half since then, however. 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.

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