- The Washington Times - Friday, February 20, 2009

The number of Americans receiving jobless benefits rose to a record near 5 million in the first week of February, and new unemployment claims jumped by a surprising 627,000, the Labor Department reported Thursday.

Economists had expected that new jobless claims would dip to 620,000 from the 623,000 of a week earlier. It was not to be.

The number of new claims and the 4.99 million people who are continuing to receive unemployment benefits, up from 4.81 million the previous week, indicate there has been no letup in the toll that the worst recession since 1982 has been taking on American workers.

And there were indications of worse to come, with General Motors repeating its intention to dismiss 47,000 workers as part of its restructuring plan and Chrysler LLC planning to lay off another 3,000.

It marked the fourth consecutive week in which the number of people who continue to receive unemployment payments has been at a record level, the highest since the recession year of 1982, during President Reagan’s first term.

The Federal Reserve predicted in a document released Wednesday that unemployment will climb to 8.8 percent this year from its current official level of 7.6 percent and that the economy will contract by 1.3 percent.

President Obama signed a $787 billion economic stimulus package Tuesday that he repeatedly has said is intended to save or create up to 3.5 million jobs within the next two years as money is spent on the country’s infrastructure and sent to the states to help them prevent job losses, among other things.

In other economic news, wholesale inflation surged unexpectedly in January, according to the Labor Department. Wholesale prices jumped 0.8 percent last month, the biggest gain since July and well above the 0.2 percent increase that economists expected.

The acceleration was led by a 3.7 percent surge in energy prices. Gasoline prices jumped 15 percent, the biggest gain in 14 months. Even outside the volatile food and energy sectors, wholesale prices showed a bigger-than-expected increase, rising 0.4 percent.

Meanwhile, the New York-based Conference Board said its January index of leading economic indicators rose 0.4 percent, the second straight monthly gain.

However, economists dismissed the gains in both wholesale prices and economic indicators as temporary blips that did not signal either a problem with inflation or a potential rebound in the economy.

The Conference Board said the single biggest boost to the index was the real money supply. The government’s effort to address the credit crisis has put more money in circulation, but banks still have not returned to normal loan operations.

The inflation jump reflected a big rise in energy costs that analysts said was unlikely to last given slack demand from a spreading global recession.

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