Job market continues to tighten
Finding work becomes harder as companies trim their payrolls
WASHINGTON – The number of laid-off workers who are continuing to draw unemployment checks jumped more than expected to 4.6 million at the end of December and is likely to keep climbing this year – fresh evidence that people are finding it increasingly difficult to get a new job amid a deepening recession.
The Labor Department’s report Thursday also said first-time applications for jobless benefits dropped to 467,000 last week. But economists largely described that decline as a distortion, reflecting the government’s difficulty in making seasonal adjustments over the holiday period. Even with the dip, the figure still signaled trouble in the labor market. A year ago, initial claims stood at 330,000.
Persistent economic woes – housing, credit and financial crises – along with a flurry of layoffs announcements in the opening days of 2009 all point to another terrible year for jobseekers, economists said.
The government’s report showed that the number of people continuing to collect unemployment benefits rose by a sharp 101,000 to 4.6 million for the week ending Dec. 27, the most recent period for which that information is available. It was worse than the 4.5 million level of claims that economists had expected.
That increase left continued claims at the highest since November 1982, when the country was emerging from a deep recession, though the labor force has grown by about half since then. A year ago, this figure stood at nearly 2.7 million. The increase underscored the painful deterioration that has occurred in the jobs market.
“Workers getting laid off are not going to get hired any time soon,” said John Silvia, chief economist at Wachovia.
Some economists believe the number of people drawing unemployment benefits could rise to as high as 5.5 million this year – even if a new government stimulus package is enacted.
President-elect Barack Obama called for a bold approach to revive the moribund economy.
“I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible,” he said Thursday, the fourth straight day he talked about the economy, the No. 1 concern of most Americans.
“If nothing is done, this recession could linger,” Obama warned. “The unemployment rate could reach double digits.”
With employers throttling back hiring, the unemployment rate is expected to jump from 6.7 percent in November to 7 percent in December, which would be the highest in 15 1/2 years. The government releases that report today.