In a report released by the Labor Department Thursday, jobless claims increased by 32,000 to a total of 516,000. That total nearly tops the 517,000 reported seven years ago and is the second-highest total since 1992. Jobless claims above 400,000 are considered a sign of a recession.
The total number of individuals seeking unemployment benefits rose to 3.9 million, about a half a million more than analysts had expected. Though the labor market has grown by about half since 1983, this is the highest total number of unemployed American workers since January of that year.
Workers stop receiving benefits once they find a new job and the increasing figure indicates that the unemployed are having trouble finding new jobs.
President Bush is calling the financial crisis a decisive moment for the global economy but "not a failure of the free market system."
In prepared remarks of a speech he's giving in New York later today, Bush says the U.S. and governments around the world must work on reforms for the global financial system, but should not try to reinvent it, the Associated Press reported. He says government intervention is not a cure-all.
Bush is hosting world leaders at a financial summit in Washington, which begins with a working dinner Friday night.
Wall Street did receive some reassuring economic news as Wal-Mart reported that it saw nearly a 10 percent increase in third-quarter profits, a reflection that Americans are looking for the low prices for basic goods.
"The Wal-Mart news, what it does is instill some confidence that there are still some companies that are still doing well," Matt McCall, president of Penn Financial Group in Ridgewood, N.J., told Reuters. "Also look at what the market has done over the last three days. It's gotten crushed. So we're in the very short-term basis oversold."
But whatever good news could be gleaned from the nation's largest retail chain's third-quarter profits is muted by the fact that the company lowered its expected full-year earnings, pointing to a weak economy and unfavorable exchange rates. Consumer spending drives more than two-thirds of the U.S. economy.
The bad economic news continued worldwide as news broke that Germany is now in a recession for the first time in five years and China's industry output growth has shrunk to its weakest in seven years.
Germany said its economy, Europe's largest, contracted by 0.5 percent in the third-quarter.
"We are going to have to face up to a very difficult and long-lasting economic crisis," Germany's Deputy Economy Minister Walther Otremba told Reuters. The decline in the country's growth is attributed to its export growth coming to a halt.
Market analysts agreed.
"The headwinds of the financial crisis and the global economic slowdown are blowing right in the face of the German economy," Carsten Brzeski of ING Financial Markets told Reuters.
"Even more worrying," Brzeski continued, "the full impact of the financial crisis still has to unfold. If you think today's numbers are already bad, just wait for the next quarter."
China has also reported lower than expected numbers as manufacturers scaled back their production. While the country had unveiled a four trillion yuan ($586 billion) stimulus package, the annual industrial output growth slowed to 8.2 percent in October, the weakest showing since October 2001.
