The Unemployment Extension Act of 2008 passed with overwhelming support in the Senate on Thursday. It calls for extending benefits by at least seven weeks in every state, and by 13 weeks in states with unemployment rates of at least 6%. It is the only bill passed so far by the lame-duck Congress.
The economic crunch gave the bill widespread bipartisan support. In June, a similar measure failed in the House. Back in 2004, amid the heat of a presidential race, the Senate rejected a bill to extend unemployment benefits by one vote, with most Republicans and President Bush opposing it.
In September, Bush had threatened to veto a broader stimulus bill that included an extension of jobless benefits.
But the White House made clear Bush would sign this bill, which was approved by the House in October. Perino, in a statement this week, which noted "the tight job market."
In most states, unemployment benefits are paid for a maximum of 26 weeks.
The U.S. Department of Labor reported Thursday that the number of people filing for unemployment insurance had reached a 16-year high.
Initial filings for state jobless benefits increased by 27,000 to 542,000 for the week ended November 15. It marks the third time since 1992 that initial claims have exceeded 500,000.
Claims are at the highest total since the week ended July 25, 1992, when 564,000 initial claims were filed.
Bob Brusca, an economist at FAO Economics, said the week's sharp uptick in claims and the fact that claims have held above 500,000 indicate the figures are in worse shape than those of the two most recent recessions of 1991 and 2001.
"The level itself is very disturbing," he said. "I would guess that the job market will get worse."
Economists surveyed by Briefing.com expected 503,000 claims. Last year, the figure stood at 333,000.
The number of people continuing to collect benefits for one week or more neared a 26-year high. That number surged by 109,000 to 4,012,000 for the week ended November 8, the most recent data available. The last time the figure was this high was for the week of December 12, 1982, when it reached 4,381,000.
The four-week moving average of unemployment claims, used to smooth fluctuations in the data, increased by 15,750 to 506,500 from 490,750 the week prior. During the past two recessions the four-week moving average has held above 400,000. This is the 18th week the four-week moving average has exceeded that benchmark.
U.S. job losses have been mounting for months. Earlier this month, the Labor Department reported the economy lost 240,000 jobs in October, bringing the total number of jobs shed in 2008 to nearly 1.2 million. The unemployment rate rose to 6.5%, a 14-year high, last month.
Companies reporting layoffs in past week include Citigroup (C, Fortune 500), which slashed 20% of its workforce, or 50,000 jobs, the biggest cut by a corporation in 15 years. Financial services firm Fidelity Investments (FNF, Fortune 500) announced that it will cut 1,700 jobs, and Sun Microsystems (SUN, Fortune 500) reported that it would lay off 6,000 people, or 18% of its workforce.
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