More Jobs Carnage: 573,000 File for Unemployment

Automakers and their extensive network of suppliers support about 3 million jobs, and many economists say the bankruptcy of one or more of the Detroit Three would make the unemployment numbers even worse.

In this file photo, people wait in line to enter a job fair in New York. New claims for unemployment benefits reached their highest level in 26 years last week, as companies cut workers at a rapid pace.

(AP Photo)

It "would have a significant impact at a very bad time," said Laurence Meyer, president of Macroeconomic Advisers and a former member of the Federal Reserve Board.

Besides Bank of America's announcement, more layoffs in other industries were announced Thursday. Tool maker Stanley Works said it plans to cut 2,000 jobs and close three manufacturing facilities.

Sara Lee Corp., known for food brands such as Jimmy Dean and Hillshire Farm, said it will cut 700 jobs as it outsources parts of its business.

Still, food companies will likely fare better over the next few months than other employers because consumers will buy food and other staples even in a recession, said Madeline Schnapp, director of macroeconomic research at Trimtabs Investment Research.

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Most Americans expect the jobs situation to get even worse, according to a poll released Thursday by the Pew Research Center for the People & the Press. Sixty-three percent think unemployment will increase next year, and 73 percent plan to cut back on holiday gifts this year, according to the poll.

The four-week average of new jobless claims, which smooths out fluctuations, is now a seasonally adjusted 540,500. That's the highest since December 1982, when the economy was emerging from a deep recession.

The number of people continuing to claim jobless benefits also jumped much more than expected, increasing by 338,000 to 4.4 million, the department said. Economists had expected a small increase to 4.1 million.

That figure also indicates that workers are having a harder time finding a job and leaving the unemployment rolls, economists said.

As a proportion of the work force, the number of people continuing to receive benefits is the highest since August 1992, when the U.S. was recovering from a relatively mild recession.