Labor Department report on jobless claims paints bleak picture for 2009 - East Valley Tribune: Business

Labor Department report on jobless claims paints bleak picture for 2009

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Posted: Wednesday, December 31, 2008 7:02 pm | Updated: 12:11 am, Sat Oct 8, 2011.

WASHINGTON - The number of laid-off workers continuing to draw unemployment benefits bolted to 4.5 million in late December, and even more Americans are expected to join the ranks of the jobless in 2009.

While first-time applications for jobless benefits dropped last week, economists mostly attributed that to the Christmas holiday and cautioned that a more accurate picture of new layoff filings won’t become clear until the holiday season has passed — around mid-January.

All in all, though, the picture painted by Wednesday’s report from the Labor Department was largely grim and is not expected to improve any time soon.

“It wasn’t a very merry Christmas for most of the labor force, and it doesn’t look like it will be a very happy New Year, either,” said Richard Yamarone, economist at Argus Research.

The report showed that the number of people continuing to draw unemployment benefits jumped by 140,000, to 4.5 million for the week ending Dec. 20, the most recent period for which information is available.

The larger-than-expected increase underscored the difficulties the unemployed are having in finding new jobs.

That left continued claims at their highest since December 1982, when the country was emerging from a deep recession, though the labor force has grown by about half since then.

A year ago, the number of people continuing to draw jobless benefits was 2.7 million.

The report also showed that the number of laid-off workers filing first-time applications for benefits dropped by a seasonally adjusted 94,000, to 492,000 for the week ending Dec. 27.

That decline, however, didn’t signal any improvement in labor conditions.

The drop — while bigger than economists expected — was mostly related to seasonal adjustment difficulties and reflected some out-of-work people not making it to unemployment offices to file claims over the Christmas holiday, analysts said.

Even with the drop, new filings remained elevated. A year ago, claims stood at 339,000.

Similarly, the four-week moving average of first-time jobless claims, which smooths out week-to-week fluctuations, fell last week to 552,250, a decrease of 5,750 from the prior week. A year ago, that number was 344,500.

Economists expected so-called “continued” claims to rise to around 4.38 million, and that first-time applications for unemployment benefits would drop to around 550,000.

Economists predict that the job situation will get worse before it gets better.

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