The number of people claiming unemployment benefits climbed to a 16-year high, according to this week’s numbers from the Labor Department, further cementing fears that the jobless rate could jump from its current 6.5 percent to nearly 8 percent next year (“Jobless Claims Reach a 16-Year High,” The New York Times, Nov. 20, 2008).

The number of people who filed for unemployment last week rose to a seasonally adjusted 542,000, far surpassing economists’ projections of 505,000 unemployment applications, according to a Thomson Reuters survey.

Ian Shepherdson, chief economist at High Frequency Economics, warned that these increasing numbers are a sign of how rapidly companies are scaling back their workforce in the declining economy (“U.S. Jobless Claims Hit 16-Year High,” Associated Press, Nov. 20, 2008).

“As far as we can tell, companies have thrown in the towel since September,” Shepherdson said, “and are now hunkering down for a deep and extended recession.”

The Department of Labor also reported that for the third straight week, the number of Americans continuing to claim unemployment insurance jumped sharply to more than 4 million. This is the highest number the U.S. economy has seen since December 1982, when the country was in the thick of a recession.

To help the unemployed, President Bush is expected to pass a bill that would give Americans who have already exhausted their unemployment benefits a seven-week extension on their benefits. In states with the highest unemployment rates, jobless benefits could be extended by as much as 20 weeks.

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