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New filings for jobless benefits drop below 500K
2008-12-31
WASHINGTON - The number of newly laid off workers signing up for unemployment benefits fell sharply last week but those continuing to draw aid climbed to the highest level since 1982. The Labor Department reported Wednesday that first-time applications filed for jobless benefits dropped by a seasonally adjusted 94,000 to 492,000 for the week ending Dec. 27. That decline, however, didn't signal any improvement in labor conditions. The drop -- while bigger than economists expected -- was partly related to seasonal adjustment difficulties and reflected some out-of-work people not making it to unemployment offices to file claims over the Christmas holiday, analysts said. Even with the drop, new filings remained elevated. A year ago, claims stood at 339,000. Laid-off workers continuing to draw unemployment benefits increased by 140,000 to 4.5 million for the week ending Dec. 20, the most recent period for which that information is available. That was the most since early December 1982, when the country was emerging from a deep recession. Economists expected a smaller increase in so-called "continued" claims to around 4.38 million, and that first-time applications for unemployment benefits would drop to around 550,000. Employers have slashed payrolls as they scramble to cut costs. The deepening recession, disappearing jobs, shriveling nest eggs and tanking home values have forced consumers to cut back, which is hurting businesses. Atlanta-based Interface Inc. on Tuesday said it will lay off about 530 employees to cope with weakening demand for its carpet products. Other companies that announced mass layoffs recently include: technology services provider Unisys Corp., pharmaceutical company Bristol-Myers Squibb Co., International Paper Co. and Bank of America Corp. The unemployment rate in November jumped to 6.7 percent, a 15-year high, as employers eliminated a staggering 533,000 jobs in that month alone. Since the recession began in December of 2007, the economy has lost nearly 2 million jobs. Spurring job creation is a key priority for President-elect Barack Obama, who takes over on Jan. 20. He is contemplating a massive package of government spending and tax cuts to stimulate the economy.
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