First-time claim applications jumped from 58,000 from the previous week and far past the 525,000 that economists expected, USA Today reported. The figure represents the highest number of jobless claims since Nov. 27, 1982, when new filings hit 612,000.
Across the country, the number of Americans receiving jobless benefits rose to 4.43 million, also the highest since late 1992, according to MarketWatch.
Financial experts have several theories for the staggering increase in filings, including the trend that the week after Thanksgiving traditionally shows the biggest jump in new claims.
“Part of the increase in filings last week could simply be administrative catch-up from Thanksgiving week, when more state unemployment offices were closed for two days,” Rex Nutting of MarketWatch reported.
Even accounting for Thanksgiving, however, the U.S. recession is forcing businesses to lay off employees at a massive rate, with the most conspicuous deterioration in the labor market.
“The underlying trend in the labor market is that it continues to weaken,” Jay Bryson, global economist with Wachovia Economics, told CNN Money.
A four-week moving average of the new claims, meant to even out special factors — such as a holiday break — showed a rise to 540,400 new claims, still the highest since 1982.
“This number suggests that the national unemployment rate will rise to 7.0 percent or more in December, versus 6.7 percent in November,” according to analysts Ried Thunberg ICAP. The November figure is up from 6.5 percent in October, according to a government report.
Following news of the unemployment report, U.S. stock futures fell but Treasuries were up to a 12/32 point gain from a 6/32 point gain before the announcement. Treasury yields eased to 2.65 percent from 2.70 percent Wednesday.
As unemployment rates across the country continue to rise, state budgets are taking a hard hit and many are sinking further into debt. A report from the Center on Budget and Policy Priorities said that 43 states are “facing shortfalls in their budgets this year, and as people continue to lose their jobs, states are pinched further,” CNN Money reported.
So far in 2008, the U.S. economy has lost a total of 1.9 million jobs.