The number of new applications for unemployment insurance hit 542,000 last week, the Labor Department reported this morning. That's up 27,000 from the revised 515,000 initial claims filed a week earlier. It's also much worse than the 505,000 initial claims economists were expecting.
While these are the highest initial claims since July 1992, it's worth noting that the nation's labor force has grown by about half since the early 1980s (AP). Still, the numbers affirm expectations that the unemployment rate--at 6.5 percent in October--will continue to climb.
"Indeed, the current four-week moving average of initial claims, at 506,000, is consistent with about a 400,000 monthly drop in nonfarm payrolls," Joshua Shapiro, chief U.S. economist at MFR, wrote in a morning note. "The latest unsmoothed initial claims result of 542,000 is consistent with almost a 500,000 monthly pace of nonfarm payroll decline."