- The Washington Times - Wednesday, December 31, 2008

UPDATED:

The number of people dismissed from their jobs who filed for state unemployment benefits for the first time dropped 94,000 last week to a seasonally adjusted rate of 492,000, the Labor Department reported Wednesday.

But there appeared little reason to cheer the news even though that number was a decrease from the 586,000 people who made initial claims the previous week and marked the lowest reading since Nov. 1 and the biggest decline since 1992.

The fall-off in the numbers was bigger than what economists had expected — they predicted that initial applications for jobless benefits would be 550,000 for the week ended Saturday — but those people who continue to receive unemployment pay climbed to the highest level since 1982.

Further, the Labor Department made it clear that the drop was at least partly related to the year-end holiday season in which fewer people than usual might have been able to file for jobless benefits.

The number of out-of-work people who continue to draw weekly checks for unemployment benefits rose by 140,000 to 4.5 million for the week ended Dec. 20, the latest period for which data was available, the Labor Department reported.

It marked the most since early December 1982, when the country was emerging from a recession during the early years of the first administration of President Ronald Reagan.

The unemployment rate stands at 6.7 percent, but analysts expect that number to climb — possibly to as high as 8 percent — as the number of layoffs is expected to continue during a recession that so far has lasted a year. The rate is the highest in 15 years. The economy has lost about 2 million jobs in the past year.

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