The number of Americans collecting unemployment benefits surged to a 26-year high as the labor market worsened in a yearlong recession.
Initial jobless claims unexpectedly fell by 24,000 to 467,000 in the week that ended Jan. 3, the lowest level in almost three months, the Labor Department said today in Washington. The total number of people getting benefits rose a week earlier to 4.6 million, the most since 1982.
While the government projects a surge in firings in late December and early January, job cuts may have come earlier last year as sinking sales and the worst credit conditions in seven decades forced companies such as General Motors Corp. and Chrysler LLC to pare costs. The claims report came as President- elect Barack Obama warned the U.S. risks sinking deeper into an economic crisis without a stimulus package of about $775 billion.
“The labor market is just hemorrhaging here,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, who correctly forecast claims would fall. “Just look at the continuing claims numbers, they give you a better idea of what is going on. Nobody can find work once they’re fired.”
Jobless claims were projected to rise to 545,000, according to the median projection of 35 economists in a Bloomberg News survey. Estimates ranged from 480,000 to 600,000. Claims in the prior week were revised to 491,000 from 492,000.
December Jobs
JOBLESS CLAIMS CRASH STATE’S UNEMPLOYMENT NETWORK
The problems occurred just weeks after New York reported that its private-sector job count fell by 23,500 from November to 7,219,700 in December.
The New York State Department of Labor’s technology collapsed Tuesday under the weight of the state’s jobless claims.
More than 10,000 calls and claims per hour poured into the unemployment insurance telephone claims center and the online claim site, overwhelming the system. Both shut down Tuesday morning. By the afternoon, the Department of Labor announced that it had fixed the automated phone system, as well as the Web site, so residents could once again report their claims.
Labor Commissioner Patricia Smith said that New York’s online unemployment claims system and the Department of Labor telephone number “experienced an unexpected but temporary shut down due to high volume of calls.”
New York experienced the extraordinary rise in claims Tuesday morning. The problems occurred just weeks after New York reported that its private-sector job count fell by 23,500 from November to 7,219,700 in December (seasonally adjusted). That represented the largest month-to-month drop since October 2001, when the state’s economy suffered a slowdown exacerbated by terrorist attacks. More than 1 million people were out of work.
In November 2008, the entire state recorded a 6.1% unemployment rate, which includes New York City, with a 6.3% unemployment rate and upstate with a 5.9% unemployment rate. The country’s unemployment rate was at 6.7% in November.
Those seeking unemployment benefits are required to report any earnings they may have received each week. They can do so by phone or through the Web site. Claimants have until Sunday to file claims for the current week, the Department of Labor said.
JOBLESS CLAIMS CRASH STATE’S UNEMPLOYMENT NETWORK, http://www.informationweek.com/news/infrastructure/management/showArticle.jhtml?articleID=212700938&subSection=Management
The State of New York some time ago converted their unemployment offices into job labor centers. To apply for unemployment in NYS, you must do it over the phone or over the internet. It can not be done in person. This has always been an accident waiting to happen.
One has never truly experienced governmental red tape, until one has experienced it in New York.
