Labor Department: Jobless Claims Drop, Ending Seven-Year High

The Labor Department reported that new applications for unemployment benefits dropped by 20,000 to a seasonally adjusted 478,000. Despite the drop, ending a seven- year high, analysts warn the amount of claims still remain elevated, indicating a recession, said the Associated Press.

The department said Hurricanes Ike and Gustav were responsible for adding about 20,000 claims on a seasonally adjusted basis. That’s down from approximately 45,000 in their previous report on the hurricanes. The four-week average, which smooths out fluctuations, rose to 482,500, the highest since October 2001. The number of Americans continuing to claim unemployment benefits rose to 3.66 million, above analysts’ estimates of 3.6 million, the highest total in more than five years.

The economy lost 159,000 jobs in September, the fastest pace of job cuts in five years. Employers have eliminated 760,000 jobs so far this year. The unemployment rate remained at 6.1% in September, up from 5.7% in July and 4.7% a year ago. ❖