U.S. Jobless Rolls Increase to Record 5.56 Million (Update2)
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By Bob Willis
March 26 (Bloomberg) -- The number of people collecting U.S. jobless benefits rose to a record 5.56 million, indicating more Americans are spending longer periods out of work. Initial claims topped 600,000 for an eighth straight time.
Total benefit rolls jumped by 122,000 in the week ended March 14, from 5.44 million the previous week, the Labor Department said today in Washington. Initial jobless applications last week rose 8,000 to 652,000, in line with forecasts.
Job cuts are spreading from companies to government agencies including the U.S. Postal Service and health-care providers. Rising unemployment means it may be harder for the Obama administration to save or create the 3.5 million jobs targeted in its recovery plan.
“We’ve still got big job losses happening but we don’t think it’s accelerating,” said Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “These continuing claims are rising to record highs because people, once they file claims, are unable to find another job.”
A Commerce Department report today showed that the economy shrank more than previously estimated in the fourth quarter, at a 6.3 percent annual rate. That compares with the median forecast of economists surveyed by Bloomberg News of a 6.6 percent drop in gross domestic product.
Treasuries, Stocks
Treasuries were little changed after the reports, with benchmark 10-year notes yielding 2.80 percent at 9:30 a.m. in New York. Stocks rose, with the Standard & Poor’s 500 Stock Index up 0.8 percent at 820.75.
Economists surveyed by Bloomberg projected claims would rise to 650,000 from the 646,000 previously reported for the prior week. Projections ranged from 625,000 to 660,000.
The four-week moving average of initial claims, a less volatile measure, fell to 649,000 from 650,000.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, rose to 4.2 percent in the week ended March 14, the highest level since 1983. Thirty- eight states and territories reported an increase in new claims for that same period while applications decreased in 15 states.
Initial claims reflect weekly firings and tend to rise as job growth slows.
Unemployment Rate
The unemployment rate, 8.1 percent in February, may rise as high as 9.4 percent by the end of the year, according to economists surveyed by Bloomberg News. In the four months through February, job losses approached 2.6 million with the economy in its longest recession in more than a quarter century.
National Semiconductor Corp. plans to cut more than 1,700 jobs, about a fourth of its workforce, as the recession eats into sales at the mobile-phone maker, the Santa Clara, California-based company said in a statement March 11.
“The worldwide recession has impacted National’s business as demand has fallen considerably,” Chief Executive Officer Brian Halla.
Increasing numbers of service and government jobs are being cut, along with manufacturing positions. The U.S. Postal Service said March 20 it will close six of 80 district offices, cut 15 percent of its district-level positions and offer early retirement to about 150,000 workers.
New York City’s Health and Hospitals Corp., the largest municipal medical-care system in the U.S., will cut 400 jobs and close community clinics, mental-health services and tuberculosis treatment programs due to reductions in state aid and higher drug and medical supply costs, agency President Alan Aviles said last week |
