Jobless claims rise for 10th straight week – recession’s bottom nowhere to be found

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WASHINGTON (AP) – For a 10th straight week, the number of people who are continuing to claim jobless benefits increased, fresh evidence that the labor market remains weak despite other hopeful signs that the recession may have bottomed out.

New claims for unemployment benefits last week rose to a seasonally adjusted 652,000 from the previous week’s revised figure of 644,000, the Labor Department said Thursday. The total number of people claiming benefits jumped to 5.56 million, worse than economists’ projections of 5.48 million, a ninth straight record and the highest total on records dating back to 1967.

The dismal job news is one indicator of the overall economic pain Americans have endured early in the new year. The Commerce Department said Thursday that the economy shrank at a 6.3 percent annual pace at the end of 2008, the worst showing in a quarter-century, and a bit faster than the 6.2 percent drop estimated a month ago.

But many economists project the economy is contracting in the current quarter at a 5 to 6 percent pace, still very weak by historical standards, but slightly better than the end of last year.

The stock market shook off the news. The Dow Jones industrial average added about 70 points in late-morning trading, and broader indices also rose.

Consumers are cutting back under the weight of rising unemployment, falling home values and shrinking investment portfolios. Those factors have forced companies to slash production and jobs. All the negative forces are feeding on each other in a vicious cycle that has deepened the recession, now in its second year.

The number of people claiming unemployment insurance for more than a week has increased by more than 100,000 four times in the past five weeks, an indication that workers are remaining on the rolls longer as they struggle to land a new job after being laid off.