Jobless Claims Soar, Again

Consider it a one-two punch to the economy: initial jobless claims jumped 58,000 last week to a 26-year high of 573,000, the Labor Department reported Thursday, following the prior week’s report that November’s bloodletting was the worst monthly decline since 1974. Jobless claims show that businesses are rapidly shedding workers. And for those who have lost their job, finding a replacement in the current economy is increasingly likely to be anything but a walk in the park.

Paul Krugman, who won the Nobel prize in economics this year, posted last week his “worries about next year” in his New York Time’s opinion column. “I’ve been ruminating over economic prospects for next year, and I’m getting scared,” Krugman wrote. The economy is falling fast and infrastructure spending will take time to get going, he said.

The Labor Department’s report showed the number of people collecting unemployment benefits leaped 338,000 to 4.43 million in the week ending Nov. 29 — the highest since late 1982, according to a MarketWatch report, and likely an indication of the treacherous waters displaced workers must wade to find new jobs.

A Department spokeswoman told MarketWatch that several technical factors could have boosted initial claims last week. The week after Thanksgiving is traditionally the one with the biggest increase in first-time claims — maybe due to an administrative catch up from the holiday week — and the government’s seasonal adjustment factors may be overstating the increase this year, she said.

Sidenote: The well-read Calculated Risk blog notes that claims hit 4.7 million during the 1982 recession … during that time, the unemployment rate peaked at 10.8 percent in 1982, compared to the 6.7 percent currently … many economists expect unemployment to reach at or above 8 percent by the end of next year.

Read the Labor Department’s full report.

Write to Kelly Curran at kelly.curran@housingwire.com.