New Jobless Claims Reach A 16-Year High, U.S. Says

New claims for unemployment benefits jumped last week to a 16-year high, the Labor Department said Thursday, providing more evidence of a rapidly weakening job market.

The government said new applications for jobless benefits rose to a seasonally adjusted 542,000 from a downwardly revised figure of 515,000 in the previous week. That was much higher than economists' expectations of 505,000, according to a survey by ThomsonReuters.

The department said that was also the highest level of claims since July 1992, when the economy was coming out of a recession.

The four-week average of claims, which smooths out fluctuations, was even worse: it rose to 506,500, the highest in more than 25 years.

In addition, the number of people continuing to claim unemployment insurance rose sharply for the third straight week to more than four million, the highest since December 1982, when the economy was in a recession.

Those figures partly reflect growth in the labor force, which has increased by about half since the early 1980s.

The unemployment rate in October was 6.5 percent, and last year it averaged 4.6 percent.

The Federal Reserve released projections on Wednesday that the jobless rate will climb to 7.1 to 7.6 percent next year, according to documents from the Fed's Oct. 29 closed-door deliberations on interest rate policy.

In another economic report, a private research group said the economy's health declined further in October as stocks, building permits and consumer expectations all fell.

The Conference Board says its monthly forecast of future economic activity declined 0.8 percent in October, worse than the 0.6 percent decrease expected by economists surveyed by Thomson Reuters.

The index, which weighs indicators like manufacturers' new orders and supplier deliveries, has fallen four of the last six months. It rose slightly in September, thanks to federal interventions that increased the money supply.

Senate Extends Benefits

WASHINGTON (Reuters) -- The Senate passed and sent to President Bush on Thursday legislation to extend jobless benefits for people who have been unemployed for a prolonged period in an economy that is losing jobs.

By voice vote, the Senate passed the bill, which had already been approved by the House.

Bush is expected to sign the measure into law.

The bill would give seven more weeks of government unemployment payments to workers who have exhausted their current jobless benefits. For those in states with the highest unemployment rates, an additional 20 weeks would be allowed.

CAPTION(S):

PHOTO: Paul Nawrocki of Beacon, N.Y., wore a signboard this week in Midtown Manhattan advertising his need for a full-time job with benefits. He said he has been looking for work for nine months.

COPYRIGHT 2008 The New York Times Company