Record high stuck on jobless rolls; leading indicators drop

WASHINGTON -- New jobless claims fell more than expected last week, but continuing claims set a record for the eighth straight week and few economists expect the labor market to improve anytime soon.

Meanwhile, the Conference Board's index of leading economic indicators fell 0.4% in February, but that was less of a drop[ than expected.

The Labor Department said Thursday that initial requests for unemployment insurance dropped to a seasonally adjusted 646,000 from the previous week's revised figure of 658,000. That was better than analysts' expectations.

But continuing claims jumped 185,000 to a seasonally adjusted 5.47 million, another record high and more than the roughly 5.33 million that economists expected.

The four-week average of claims rose to 654,750, the highest since October 1982, when the economy was emerging from a steep recession, though the labor force has grown about half since then.

The job market has been hammered as employers, squeezed by reductions in consumer and business spending, cut their work forces. The unemployment rate reached 8.1% last month, the highest in more than 25 years. Many economists expect the rate could reach 10% by the end of this year.

The Federal Reserve said Wednesday it will pump $1.2 trillion into the economy in an effort to lower rates on mortgages and other consumer debt and loosen credit. To do so, the Fed will spend up to $300 billion to buy long-term government bonds and an additional $750 billion in mortgage-backed securities guaranteed by Fannie Mae and Freddie Mac.

As a proportion of the workforce, the number of Americans on the jobless benefit rolls is the highest since June 1983. The 5.47 million continuing claims also were up substantially from a year ago, when only about 2.85 million people were continuing to receive unemployment checks.

The increase in continuing claims is an indication that many newly laid-off workers are having difficulty finding jobs.

And even that number is deceptively low: an additional 1.5 million people were receiving benefits under an extended unemployment compensation program approved by Congress last year. That tally was as of Feb. 28, the latest data available.