Initial jobless claims rise to a 26-year peak

WASHINGTON - The number of Americans filing first-time claims for unemployment insurance rose last week to a 26-year high, indicating employers are stepping up job cuts as the recession deepens.

The 586,000 claims - up from 556,000 the previous week - were more than forecast and the most since November 1982, the Labor Department said yesterday.

The four-week moving average of claims, a less volatile measure, also was the highest since 1982. Both figures have been touching new highs in recent weeks.

"This level is consistent with pretty significant declines in payrolls," said James O'Sullivan, a senior economist at UBS Securities L.L.C., of Stamford, Conn. "The economy is still deteriorating, and I don't think there will be a quick turnaround."

Employers have cut 1.9 million jobs since the recession began last December, and the unemployment rate has risen from 5.0 percent to 6.7 percent.

Initial claims for benefits, those filed by workers just laid off, are a sign that the jobless rate will continue to rise in coming months. They had been projected to increase to 558,000 last week, according to the median of 32 forecasts in a Bloomberg News survey.

In Pennsylvania, new claims in the week that ended Dec. 13 - one week behind the national figures released yesterday - fell 12,438, which state officials attributed to fewer claims in the construction, service and transportation industries. New Jersey's new claims that week dropped 2,388 because of fewer layoffs in the trade, service, transportation and warehousing industries and in manufacturing.

Compared with a year earlier, new claims were still up more than 14,000 in Pennsylvania and up more than 4,000 in New Jersey.

Economists consider jobless claims a timely, if volatile, indicator of the health of the labor markets and broader economy. A year ago, initial claims nationwide stood at 353,000.