Total number of jobless workers hits nine-year high | CraigDailyPress.com

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Total number of jobless workers hits nine-year high

WASHINGTON (AP) New claims for state unemployment insurance rose last week to the highest level since mid-July while the number of laid-off workers drawing unemployment benefits rose the highest level in nine years.

The number of workers filing new applications for jobless benefits increased by a seasonally adjusted 8,000 to 393,000 for the week ending Aug. 4, the Labor Department reported Thursday. That pushed new filings for jobless benefits to the highest level since the week ending July 14, when they stood at 417,000.

In a significant sign of how the year-long economic slowdown has affected American’s ability to get a job, the government reported that the number of workers drawing benefits rose to 3.18 million.

That was the highest level since the number of jobless workers drawing benefits hit 3.21 million in September 1992 as the country was still struggling to emerge from the last recession.

Economists say that both new filings and the number of people remaining in the benefit program are good indicators of the health of the labor market. The new filing shows whether layoffs are rising as companies cut their workforce in a slowing economy while the number of people remaining in the program indicates how much trouble laid-off workers are having getting new jobs.

The government reported that the overall unemployment rate remained at 4.5 percent in July, its highest level since the country entered a significant slowdown in growth in the summer of last year.

The overall economy grew at a barely discernible annual rate of 0.7 percent in the April-June quarter, the weakest performance in more than eight years.

Many economists are predicting growth should rebound by the end of this year, reflecting seven interest rate reductions by the Federal Reserve and the nearly $40 billion in tax rebate checks the government is now in the process of mailing out.

However, economists warn that even if the economy does turn up as expected, the jobless rate will still go higher, reflecting the reluctance of employers to add back workers until they are sure the rebound is sustainable.