New jobless claims surge to a 26-year high

Graph showing increase of jobless claims soaring to 626,000 in January. From MSNBC News.

More bad economic news showing that nation's unemployment picture is still deteriorating. From MSNBC News:

New jobless claims soared to a more than 26-year high in the latest week and a record number of Americans are receiving jobless benefits, according to government data released Thursday. Meanwhile, productivity soared at the end of last year as companies cut the number of hours worked faster than output declined, a reflection of the massive number of layoffs.

And factory orders dropped for a fifth straight month in December, closing out the weakest year since 2002.

The only bright spot was that with all the job cuts, labor costs have slowed, removing one threat of inflation.

The Labor Department reported Thursday that the number of laid-off workers seeking jobless benefits rose last week to a seasonally adjusted 626,000, from the previous week's upwardly revised figure of 591,000. The latest total is far more than analysts' expectations of 583,000.

That's also the highest since October 1982, when the economy was in a steep recession, though the work force has grown by about half since then.

The number of people that remained on the unemployment compensation rolls increased slightly to nearly 4.8 million, the most since records began in 1967.

As a proportion of the work force, the number of people receiving unemployment benefits is at the highest level since August 1982. But that doesn't include an additional 1.7 million people receiving unemployment insurance through an extension of benefits Congress approved last year, which brings the total to about 6.5 million.

Tomorrow's unemployment report for January is expecting to show U.S. employers slashing 525,000 jobs, in addition to cutting another 524,000 jobs in December. In other words, we are still not out of the woods yet.