New Jobless Claims Pass 500,000 to 7-Year High

The number of U.S. workers filing new claims for jobless benefits rose last week to 516,000, the highest level since the weeks following the Sept. 11, 2001 attacks, the Labor Department reported on Thursday.

The figure outstripped forecasts, with analysts polled by Reuters expecting initial claims to be only 484,000. The claims were last at this high a level in the week ended Sept. 29, 2001, when they were 517,000. (See video analysis of jobless data, left.)

U.S. stock index futures added to their losses on news of the jump in claims.

"This is unremitting bad news. It will continue to be a major issue," said David Wyss, chief economist at Standard & Poor's Ratings Services, noting that there were large auto layoffs in Michigan and Ohio. "This suggests another real bad number for November payrolls after what we saw in October."

The U.S. unemployment rate hit a 14-year high of 6.5 percent last month and many forecasters expect it to soar to 8 percent or more next year as the economy suffers what could be a deep and long recession.

A department official said there were no special factors contributing to the spike in claims, but noted that jobless claims often rise as the year winds down.

A four-week moving average of claims, which smoothes out weekly variations, was 491,000, the largest since March 1991.

Continuing claims reached 3.897 million for the week ended Nov. 1, the latest period for which the data was available, which was an increase from 3.832 million the prior week and marked the most people filing for ongoing unemployment assistance in a quarter of a century. Continuing claims were 3.95 million in the week ended Jan. 15, 1983.

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