Jobless rolls hit 25-year high

US home sales, durables orders fall in December

The Labor Department said that a seasonally adjusted 4.78 million Americans claimed unemployment insurance for the week ended Jan. 17. (Marcio Jose Sanchez/Associated Press)

WASHINGTON - Week by week, the numbers that measure the economy get worse, heading toward uncharted territory.

The Labor Department released figures yesterday showing that the percentage of the workforce receiving unemployment benefits reached a 25-year high in mid-January.

The raw numbers were the highest since the government started keeping records in 1967, although the workforce was much smaller then.

Adding to the grim picture were separate government reports that showed December home sales plunged to their lowest rate since recording began in 1963 and that orders for big-ticket manufactured goods dropped more than expected, capping the worst year for manufacturers since 2001.

But the jobless numbers were the worst - with more layoffs on the way.

The Labor Department reported yesterday that a seasonally adjusted 4.78 million Americans claimed unemployment insurance for the week ended Jan. 17. That's an increase of 159,000 from the previous week and worse than economists' expectations.

As a percentage of workers covered by unemployment insurance, the tally is the highest since August 1983.

The figures underscored how hard it is for laid-off workers to leave the unemployment rolls by finding a new job amid the deepening recession.

And the 4.78 million figure is deceptively low. It doesn't include about 1.7 million people receiving benefits under an extended unemployment compensation program authorized by Congress last summer, meaning the total number of recipients is actually closer to 6.5 million. That pushes the share of the workforce receiving benefits to the highest level since December 1982, when the economy was recovering from a steep recession.

Jobless benefits typically last 26 weeks, but Congress usually authorizes extensions during downturns.

More job cuts were disclosed yesterday. Cessna Aircraft Co., part of the Providence conglomerate Textron Inc., said it plans to lay off 2,000 workers, on top of 2,600 cuts it revealed earlier this month. Ford Motor Co. said its credit arm would cut 20 percent of its workforce, or 1,200 jobs.

On the housing front, the Commerce Department said new-home sales fell 14.7 percent in December to a seasonally adjusted annual rate of 331,000, the lowest pace on records dating back to 1963. For 2008, builders sold 482,000 homes, the weakest results since 1982.

The median price of a new home sold last month was $206,500, a drop of 9.3 percent from a year ago.

Meanwhile, new orders for durable goods dropped by 2.6 percent last month, worse than the 2 percent decline economists expected.

Orders fell 5.7 percent for the year, the second-biggest drop on government records, exceeded only by a 10.7 percent plunge in 2001, according to Commerce.

US data due out today are expected to show the economy contracted at a rate of 5.4 percent in the final three months of last year, according to the consensus estimate of economists surveyed by Thomson Reuters.

The tally of Americans filing new jobless benefit claims rose slightly to a seasonally adjusted 588,000 last week, worse than analysts expected.

That nearly matched a late December tally of 589,000, the largest in 26 years although the labor force grew by about half during that time.