The number of people filing for first time unemployment benefits spiked higher in the latest week, continuing the sharp upward trend that began during the first part of this new year. According to the US Department of Labor, for the week ending February 21st, initial jobless claims rose by 36,000, to stand at 667,000. That’s the highest level since October 1982. The reading is above economists’ estimates, as expectations were for a slight dcrease to 625,000 new claims. For some perspective: initial claims running consistently atop the 350,000 mark would signal some weakening in the labor market. Claims above 400,000 are seen by many as a signal of recession.

Having witnessed extremely volatile measurements in the past few weeks, it is wise to consider the four-week moving average of initial claims, which smooths out one-time factors such as bad weather or holidays. The four-week average continued its trek upwards, rising by 19,000 to 639,000. It is now at the highest level since October 1982.

The underlying trend in claims is still rising, and could reach a peak of 750,000, according to Ian Shepherdson, chief U.S. economist with High Frequency Economics. – MarketWatch.

It is pretty obvious now that businesses are laying more employees off, and at a faster pace, and that the unemployed are having a tougher time looking for a replacement job. A year ago, initial claims were at 359,000.

But, although claims are at levels not seen since the severe 1982 recession, the context today is much different. For one, the workforce is around 50% larger than it was in 1982, so the frightening 667,000 number is not nearly as bad as it was then.

For the week ending Feb. 14, the number of people collecting benefits reached a record high, rising 114,000 to 5.11 million – a level that is 86% higher than in the prior year. The four-week average of continuing claims was also a record, gaining 89,250 to 4.93 million – a level that is 80% higher than in the prior year.

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