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Americans Receiving Jobless Benefits Reach Record 4.99 Million
By Bob Willis
Feb. 19 (Bloomberg) -- The number of Americans collecting unemployment benefits jumped to 4.99 million two weeks ago, breaking a record for a fourth straight time, signaling the job market is still deteriorating.
Total benefit rolls surged by 170,000 in the week ended Feb. 7, the Labor Department reported today in Washington. First-time applications for unemployment benefits were unchanged at 627,000 last week, higher than economists projected.
General Motors Corp. and Chrysler LLC this week announced an additional 50,000 workers would be cut from payrolls as crumbling demand for autos deepens a recession now in its second year. President Barack Obama is counting on the $787 billion stimulus plan he signed into law this week to create or save 3.5 million jobs and stem the slump in spending.
``The labor market is under a considerable amount of stress,'' Jeffrey Roach, chief economist at Horizon Investments in Charlotte, North Carolina, said before the report. ``A weakening job market portends a weakening retail market. Spending will continue to subtract from growth this quarter.''
Prices paid to U.S. producers rose in January for the first time in six months as fuel costs climbed, another Labor report showed. The 0.8 percent increase in wholesale costs was higher than forecast and followed a percent 1.9 decline in December. Over the last 12 months, producer prices fell 1 percent, the biggest year-over-year decline since 2006.
Economists forecast claims would fall to 620,000 from a previously reported 623,000, according to the median forecast of 39 estimates in a Bloomberg News survey. Projections ranged from 590,000 to 660,000.
Most Since 1982
The four-week moving average of claims, a less volatile measure, rose to 619,000 last week, the highest level since November 1982, from 608,500 the previous week.
The unemployment rate among people eligible for benefits, which tends to track the U.S. jobless rate, climbed to 3.7 percent in the week ended Feb. 7, from 3.6 percent a week earlier.
Thirty-two states and territories had an increase in new claims for the week ended Feb. 7, while 21 reported a decrease.
U.S. companies in January sacked 598,000 workers, the most since December 1974, the Labor Department said Feb. 6. The U.S. has lost 3.6 million jobs since the recession began in December 2007. The jobless rate climbed last month to a 16-year high of 7.6 percent.
The world's largest economy will contract 2 percent this year, according to projections in a Bloomberg News survey taken Feb. 2 to Feb. 10. The drop was a half percentage point more than estimated in January. The unemployment rate may climb to 8.8 percent this year, according to the poll.
Auto Firings
GM, the largest U.S. automaker, will cut about 47,000 more jobs worldwide as it sheds brands and seeks as much as $16.6 billion in new loans to avoid bankruptcy, the Detroit-based automaker said this week. Chrysler, propped up like GM with federal assistance, said it's seeking $5 billion more from the government and will shed 3,000 more positions.
``We have continued to see an unprecedented decline in the automotive sector,'' Chrysler Chief Executive Officer Robert Nardelli said in a briefing with reporters. ``The focus of this company for the last two years and going forward is going to be to right-size for the marketplace and the realities of the economy.''
The reductions are reverberating through the industry. Goodyear Tire & Rubber Co., the largest U.S. tiremaker, yesterday said it posted a fourth-quarter net loss of $330 million and plans to cut almost 5,000 jobs. The Akron, Ohio-based company said it eliminated 4,000 jobs and imposed a salary freeze in the second half of last year.
To contact the reporter on this story: Bob Willis in Washington at [email protected]
Last Updated: February 19, 2009 08:30 EST
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