According to the U.S. Labor Department new unemployment benefits claims jumped last week to their highest levels in seven years. The departments report stated that new requests for jobless benefits for the week of Sept. 20th increased by 32,000, much higher than expectations. Experts claim that the elevated jobless rates are due mostly to the effects of the recent hurricanes.
But even without the hurricanes, jobless claims remain higher than usual. Weekly claims have now surpassed 400,000 for ten straight weeks. This is clearly a sign of an economic recession. Just a year ago, claims were steady at 309,000. The Labor Department's most recent report is a clear warning that there is a serious deterioration in the job market. This increase in the jobless rate will most likely accelerate as the distressed markets continue to experience severe corrections and credit becomes even more difficult to access for businesses.