Jobless claims surge to 26-year high
Number of Americans filing unemployment insurance hits 589,000, highest since November 1982.
NEW YORK (CNNMoney.com) -- The number of Americans filing for first-time unemployment benefits rose last week to a 26-year high, according to a government report released Thursday.
The Labor Department said that initial filings for state jobless benefits rose 62,000to 589,000 for the week ended Jan. 17.
Economists polled by Briefing.com expected the reading to rise to 548,000 claims. Jobless claims were revised up 3,000 to 527,000for the week ended Jan. 10.
The last time jobless claims were this high was in November 1982, when jobless claims surged to 612,000.
Ian Shepherdson, an economist with High Frequency Economics in New York, cautioned that the impact of Christmas and New Year's Day as well as the extended auto sector shutdowns continue to cloud the data. But he believes the ranks of Americans filing for benefits will climb.
"The corporate sector is rolling over, and we probably have not yet seen many job losses stemming from the sudden collapse in international trade," Shepherdson wrote in a research note.
Joshua Shapiro, an economist at Maria Fiorini Ramirez Inc., said the data should begin to show the direction of the job market by early next month.
But he noted that both the high number of initial claims and people receiving benefits for one week or longer point to "a significant rate of deterioration in labor market conditions."
The number of Americans receiving jobless benefits for a week or longer is up 68% from a year ago, measured on a four-week average basis, according to Shapiro.
The four-week average of new unemployment claims was unchanged from from the prior week's revised average of 519,250. A year ago, it was at 327,000.
The four-week moving average is designed to smooth out some of the week-by-week fluctuations, and give a broader view of the U.S. job market.
The number of people continuing to collect unemployment insurance for one week or more rose by 97,000 to 4.61 million in the week ended Jan. 10, the most recent data available. A year ago, it was at 2.68 million.
Over the previous four weeks, the number of people on unemployment for one week or more increased by 58,750 to an average of 4.56 million a week, the government said. A year ago, it was at 2.71 million.
The greatest number of layoffs for the week ending Jan. 10 were in Michigan, with nearly 35,000 job losses, California with 22,573 and Florida, with 20,658.