New jobless claims drop slightly to 623,000

WASHINGTON — Nearly 5 million Americans continued to draw jobless benefits late last month, and new requests again exceeded 600,000 as companies lay off scores of workers amid a deepening recession.

The Labor Department said today that the number of initial jobless benefit claims dropped to a seasonally adjusted 623,000, from an upwardly revised figure of 631,000 the previous week. The latest tally still was above analysts' expectations of 610,000 claims.

And in a sign that laid-off workers are having difficulty finding new work, the number of people claiming benefits for more than one week rose to 4.81 million from 4.78 million, the highest total since records began in 1967. The continuing claims data lag new claims by a week.

An additional 1.5 million people are receiving benefits under an extended unemployment compensation program approved by Congress last year, bringing the total number of recipients to 6.3 million.

Continuing claims are up sharply from a year ago, when the figure was 2.7 million.

"The smaller-than-expected decline suggests that the recent spike in claims reflects a fundamental deterioration in labor market conditions rather than statistical noise," David Resler, chief economist at Nomura Securities, wrote in a research note.

The 631,000 new jobless claims filed two weeks ago was the highest tally since October 1982, when the economy was emerging from a steep recession, though the labor force has grown by about half since then.

The four-week average of claims, which smooths out fluctuations, rose by 24,000 to 607,500, the first time that figure has topped 600,000 in the current recession.

Economists consider jobless claims a timely, if volatile, indicator of the health of the labor markets and broader economy. A year ago, initial claims stood at 339,000.

Companies from a range of sectors are hemorrhaging jobs as the recession worsens. Consumers have cut back on their spending in response to declining home values and plummeting stock portfolios, and businesses also are tightening their belts.