573,000 file for unemployment benefits - East Valley Tribune: Business

573,000 file for unemployment benefits

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Posted: Thursday, December 11, 2008 8:43 pm | Updated: 11:18 pm, Fri Oct 7, 2011.

WASHINGTON  -  New claims for jobless benefits surged last week and came in worse than expectations that were already gloomy — and economists say the figures would get even worse without an auto industry bailout.

Initial applications for unemployment benefits rose to a seasonally adjusted 573,000, the Labor Department said Thursday. That was nearly 50,000 more than economists were expecting and up from a revised 515,000 the week before.

The last time so many Americans filed new jobless claims in a single week was in 1982, although the labor force has grown by about half since then.

Adding more damage to the already ravaged labor market, Bank of America said it expected to cut as many as 35,000 jobs over the next three years, including some from investment bank Merrill Lynch, which it agreed to buy in September.

Separately, the U.S. trade deficit rose unexpectedly in October, partly because of dampened demand for American exports. The gap was $57.2 billion in October, up from $56.6 billion in September. Analysts had been expecting a decline because of falling oil prices.

The numbers came as legislation to provide a $14 billion bailout to the auto industry ran into resistance from auto workers union.

Both President-elect Barack Obama and a spokeswoman for President George W. Bush cited the jobless claims numbers in support of the bill.

In unusually stark terms, White House spokeswoman Dana Perino said the economy is so weak right now it “cannot sustain” a collapse of the auto industry. And in Chicago, Obama said an industry shutdown would have a “devastating ripple effect” on the already staggering economy.

The reports, along with investor concerns about the auto bailout bill’s future, sent stock markets falling. The Dow Jones industrial average finished down almost 200 points, closing at 8,565.

General Motors Corp. and Chrysler LLC executives have said they could run out of cash within weeks without government help. Ford Motor Co., which would also be eligible for federal aid under the bill, has said it has enough cash to make it through 2009.

Automakers and their extensive network of suppliers support about 3 million jobs, and many economists say the bankruptcy of one or more of the Detroit Three would make the unemployment numbers even worse.

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