Washington: The number of Americans living on unemployment benefits has topped five million for the first time with as many as 667,000 filing initial jobless claims last week, the highest since October 1982.
For the week ended Feb 21, 667,000 Americans filed initial claims for unemployment insurance, up 36,000 from a revised 631,000 the previous week, according to a Labour Department report released Thursday. Economists polled by Briefing.com were expecting claims to drop to 625,000.
In a sign that more jobless Americans are having trouble finding work, a record high of 5,112,000 continued on unemployment for the week ended Feb 14, the most recent data available. That's the highest number since the Labour Department began keeping records since 1967.
Initial claims are expected to sharply increase, and it's likely they will reach 750,000 per week in the coming months, according to Ian Shepherdson, economist at High Frequency Economics in New York, cited by CNNMoney.com.
He noted that weekly filings, adjusted for population growth, would have to exceed the 1 million mark in order to break the jobless claims reported from the mid-1970s and early 1980s.
"We fervently hope that does not happen but we are not confident. Companies are throwing in the towel as they recognise that no sector is safe," Shepherdson wrote in a note.
The four-week moving average of initial claims was 639,000, an increase of 19,000 from the preceding week. The average is used to smooth fluctuations in data.
The four-week moving average for people continuing on unemployment was 4,932,250, an increase of 89,250 from 4,843,000 in the previous week. The insured unemployment rate is 3.8 percent, nearly double the 2.1 percent rate from a year ago.
Under President Barack Obama's stimulus plan, the weekly unemployment benefit will temporarily increase by $25 on top of the roughly $300 jobless workers currently receive. In addition, the first $2,400 of benefits in 2009 would be exempt from federal income taxes.
The stimulus also provides jobless workers with an additional 20 weeks in unemployment benefits, and 13 weeks on top of that if they live in what's deemed a high unemployment state.