The Labor Department announced Thursday at that the initial applications for unemployment insurance benefits have increased to a level not seen since November 1982, even though the labor force has grown by about half since them. In the week ending December 6, 573,000 applications were received, far more than the 525,00 claims that economists were expecting.
The number of people continuing to claim jobless benefits also jumped much more than expected, increasing 338,000 to 4.4 million. Economists expected a small increase to 4.1 million.
The percentage of the workforce continuing to receive benefits is the highest since August 1992, when the U.S. was recovering from a mild recession.
The increase in continuing claims was the largest jump since November 1974, the department said.
Economists consider jobless claims a timely indicator of the health of the labor markets and broader economy. A year ago, weekly initial claims were 337,000.
As President-Elect Barack Obama rightly stated in his weekly YouTube Address, this is yet another sign of the bad economic times that resulted from the mortgage crisis.
Earlier this week we learned that the number of Americans filing their first claim for unemployment insurance rose to a nearly 30-year high. This news reflects the pain that’s been rippling across this entire economy. Jobs are being cut, wages are being slashed, credit’s tight and people can’t get loans. In cities and towns all across this country, families enter a holiday season with unease and uncertainty.
To end this economic crisis, we must end the mortgage crisis where it began.
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