US Jobless Claims At Record High

by Chris Sturr | February 26, 2009

The US shed 600,000 jobs in January alone. It’s looking like we’ll lose another 700,000 in February. From the wires:

WASHINGTON (Reuters) – The number of U.S. workers drawing jobless aid jumped to a record high in mid-February, while the recession undercut demand for manufactured goods last month and sent new homes sales to their lowest since 1963.

The worsening global economic slump pushed new orders for long-lasting U.S. manufactured goods to a six-year low in January. The housing market, at the center of the downturn, continued to slow and sales of new home hit a record trough in January, according to government reports on Thursday.

“We are deteriorating about as fast as we can, the data today were pretty catastrophic. The economy is going to continue to contract, probably at least until the middle of the year,” said Stephen Stanley, chief economist at RBS Greenwich Capital Markets in Greenwich, Connecticut.

Companies are cutting staff to lower costs as demand slumps and banks limit access to credit. However, rising unemployment is sapping consumer spending and piling pressure on an economy wallowing in a 14-month recession.

The number of people remaining on the benefits roll after drawing an initial week of assistance increased by 114,000 to a record 5.11 million in the week ended February 14, the most recent week for which data is available, the Labor Department said.

Initial claims for state unemployment insurance benefits increased to a seasonally adjusted 667,000 last week from 631,000 the prior week, the department said. It was the highest reading since October 1982.

The surge in weekly applications for unemployment benefits implied February’s jobs report could show a decline in payrolls in excess of 700,000, according to some economists.

“It’s getting uglier by the day. According to our model estimate, the recent surge in initial jobless claims signals a decline in February payrolls of about 750,000,” said Harm Bandholz, an economist at Unicredit Markest & Investment Banking in New York.

Payrolls declined by nearly 600,000 in January, the largest drop since 1974.

Full story here.

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