The hits keep coming

WASHINGTON - New claims for unemployment benefits hit a 16-year high last week, the government said yesterday, and some economists warned of further waves of layoffs.

Even already-battered industries such as construction and manufacturing are expected to cut more jobs. Layoffs also are likely in such sectors as retailing, transportation and hotels and restaurants.

"I don't think any of these sectors have reached the bottom," said Carl Riccadonna, an economist at Deutsche Bank AG.

A separate report yesterday from the Conference Board painted a grim picture of the next six months. The private business group's monthly forecast of economic activity fell 0.8 percent in October.

The Labor Department said new claims for jobless benefits rose in the week ended Nov. 15 to a seasonally adjusted 542,000 from 515,000 in the previous week, a far larger increase than Wall Street economists expected.

It is the highest level of claims since July 1992, the department said, when the U.S. economy was emerging from a recession. The four-week average of claims, which smoothes out week-to-week fluctuations, was even worse: It rose to 506,500, the highest in more than 25 years.

The news contributed to another disastrous day on Wall Street: The Dow Jones industrial average fell 444 points.

After news of the soaring jobless claims, the Senate approved legislation to extend unemployment benefits - now at 39 weeks - for an additional seven weeks. The White House said President Bush would quickly sign the bill. Those in states where the jobless rate is 6 percent or more, including New Jersey, would be eligible for an additional 13 weeks - a total of 20 extra weeks. Benefit checks average $300 a week.

Without the legislation, its proponents say, 1.1 million people would have exhausted their unemployment insurance by the end of the year.

Meanwhile, the drop in the Conference Board's index of leading economic indicators was worse than the 0.6 percent drop analysts had expected. Contributing to the decline were the stock market, building permits and consumer expectations, the group said. Over the last seven months, the index has fallen at a 4.7 percent annual rate, faster than any decline since 2001.

Joshua Shapiro, chief U.S. economist for MFR Inc., said he expected companies to cut 400,000 jobs in November.

The economy has slowed sharply in recent months because of the housing slump and the broader financial crisis, which have led consumers and businesses to cut spending. Higher unemployment is expected to further fuel the downward spiral.