Jobless claims rise more than expected

New claims for unemployment benefits increased more than expected last week, rising to 640,000 from 613,000 the previous week, according to USA Today. Economists were expecting 635,000.

In addition, the number of people continuing to claim unemployment benefits increased to 6.13 million, setting a record for the 12th week and signaling that laid-off workers are having difficulty finding new jobs.

Economists have been watching the unemployment benefits data because they believe a continuous decline in initial claims could signal the recession is starting to end. Historically, jobless claims peak six to 10 weeks before a recession ends. The four-week average of claims dropped to 646,750, which is about 12,000 below the peak earlier this month; New York-based Goldman Sachs economists say a decline of 30,000 to 40,000 in the four-week average signals a peak.

Since the recession began in December 2007, employers have cut 5.1 million jobs. The unemployment rate reached 8.5 percent—the highest in 25 years—when companies cut a net 663,000 jobs in March. The International Monetary Fund has predicted the global economy will shrink 1.3 percent this year, which is the first drop in more than 60 years, and the U.S. economy will drop 2.8 percent, which is the worst decline since 1946.

Date : 4/27/2009