Thursday, December 11, 2008

Jobless Claims Hit 26-Year High

WASHINGTON -- The number of U.S. workers filing new claims for state unemployment benefits rose more than twice as much as expected last week to a 26-year high indicative of continued employment declines amidst a recessionary economy. Separately, the U.S. trade deficit unexpectedly widened in October, rising for the first time in three months as a record increase in quantity of oil imported offset falling oil prices and plunging car purchases. Initial claims for jobless benefits spiked 58,000 to a seasonally adjusted 573,000 in the week ended Dec. 6, the Labor Department said in a weekly report Thursday. Economists surveyed by Dow Jones Newswires had expected claims would rise by 24,000. The four-week average of new claims, which aims to smooth volatility in the data, also reached a nearly 26-year high, rising 14,250 to 540,500 from the previous week's revised average of 526,250. Several factors contributed to the elevated numbers, a Labor Department analyst said. The week after Thanksgiving traditionally shows the largest increase in unadjusted claims filings, a factor that combined with administrative catch-up related to the holiday and a low seasonal adjustment hurdle drove up numbers. The tally of continuing claims, those drawn by workers collecting benefits for more than one week in the week ended Nov. 29, also rose, climbing 338,000 to 4,429,000 suggesting it is taking the unemployed longer to find new work. The increase is the largest in 34 years and brings the level of continuing claims near one not seen since 1982. The data comes after 11 months of declining nonfarm payrolls. Employers in November alone shed 533,000 jobs as the unemployment rate continued rising. The latest data suggests those trends are continuing into December. The unemployment rate for workers with unemployment insurance rose again last week, climbing to 16-year high of 3.3%. Not adjusted to reflect seasonal fluctuations, Wisconsin reported the largest jump in new claims during the Nov. 29 week due to an increase in layoffs in the construction, trade, service and manufacturing industries. The state reported initial claims of more than 16,000 for the week. California reported the largest decrease due to fewer layoffs in the service industry. Trade Deficit Widens The U.S. deficit in international trade of goods and services rose by 1.1% to $57.19 billion from September's revised $56.56 billion, the Commerce Department said Thursday. Originally, the September deficit was estimated at $56.47 billion. The last time the deficit had gone up was July. The U.S. deficit with China rose, widening to $27.96 billion from September's $27.77 billion. The overall U.S. trade deficit of $57.19 billion was much bigger than expected by Wall Street. Economists surveyed by Dow Jones Newswires estimated a $52.8 billion shortfall in October. Analysts thought the deficit would shrink for a couple reasons. A weak U.S. economy is curbing demand for overall imports. Also, falling oil prices have lowered the value of oil imports. The numbers Thursday showed oil prices did fall -- by a record amount. Yet crude import volume increased, also by a record amount. Overall imports declined -- modestly. The trade report showed U.S. exports in October declined 2.2% to $151.73 billion from $155.09 billion. The economies of the nation's major trading partners have slowed, hurting overseas sales of U.S. goods and services. Imports fell 1.3% to $208.92 billion from $211.65 billion. Crude oil imports climbed to $29.83 billion from $27.25 billion in September. The average price per barrel decreased by a record $15.56 to $92.02 from $107.58. The volume of oil imported increased to 324.19 million barrels from 253.28 million; the advance of 70.9 million barrels was a record. The U.S. paid $37.63 billion for all types of energy-related imports, up from $36.18 billion in September. Imports of industrial supplies, which includes chemicals and copper, slipped $104 million. Imports of capital goods such as computer accessories dived $1.4 billion. Auto and related parts imports fell by $921 million. Americans are cutting car purchases because of tight credit and an uncertain economy, with fears swirling of layoffs. Purchases of foreign-made consumer goods, however, like pharmaceutical preparations and clothes climbed in October by $466 million. Food and feed imports rose $81 million. As for exports, U.S. sales abroad of cars and parts decreased $236 million. Consumer goods exports fell by $156 million. Sales of industrial supplies dropped $1.41 billion. Food, feed, and beverages went down $774 million. U.S. sales abroad of capital goods decreased by $113 million during October. Within that category was a big decrease in sales of civilian airplanes; there was a strike earlier this autumn at aircraft giant Boeing. U.S. trade deficits with some of its major trading partners were mixed in October, Commerce said. The deficit with Japan widened to $6.05 billion from $5.59 billion. The trade gap with the euro area widened to $7.71 billion from $5.99 billion. The deficit with Canada fell to $5.96 billion from $7.63 billion. The U.S. gap with Mexico slid to $4.80 billion from $4.94 billion.

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