Jobless Benefit Claims Hit 8-Year High

The number of Americans claiming unemployment benefits reached its highest level in eight years in late March, the government reported Thursday--suggesting that the end of the Persian Gulf conflict is not leading to an economic rebound as quickly as had been hoped.

New figures published by the Labor Department showed that the number of new applications for unemployment benefits soared to 543,000 during the week ended March 23--a jump of 33,000 from the previous week and the highest since late January, 1983.

The increase in the weekly figures sent economists speculating that the unemployment report for March, which is scheduled to be made public this morning, would show another big jump in the jobless rate from the 6.5% of the work force reported for February.

Many analysts believe that the national jobless figure due out today could climb to 6.7% of the work force, as employers continue cutting payrolls in the face of a weak economy. The February rate of 6.5% itself was a four-year high.

Gary Ciminero, chief economist with the Fleet/Northstart group in Providence, R.I., said the new figures bolstered fears that the slump may continue for several more months. “The bottom line is that the end of the war has not ended the recession,” he said.

Lawrence Chimerine, a senior analyst at DRI/McGraw Hill, agreed. “It’s a bad number no matter how you look at it,” Chimerine said. “It’s a response not only to the Middle East crisis but some of the structural factors holding the economy down.”

Some analysts speculated that today’s unemployment figures may prompt the Federal Reserve Board to push interest rates still lower. The Fed has been nudging rates down steadily for the past several months, and officials said it will continue as long as added stimulus is needed.

The figures came as, separately, a new report by a liberal think tank contended that despite the recession, the percentage of Americans receiving unemployment benefits in 1990 was smaller than at any time since World War II.

The study by the Center on Budget and Policy Priorities, a labor-backed group, said only 37% of the nation’s jobless received unemployment benefits in an average month last year.

By contrast, in the nearly four decades from the end of World War II through 1983, the percentage of the unemployed receiving unemployment benefits dipped below 40% only once--in 1966, when it dipped to 39%. In 1975, the figure was 75%, the document said.

The report called the current level of protection “unparalleled.”

The report by the center is the latest in a series of criticisms of the nation’s unemployment insurance system, which was created during the Great Depression years of the 1930s to help provide a cushion for jobless Americans.

The report cited several developments that it said may help account for the current low level of coverage. It said states have tightened eligibility requirements so that fewer people qualify. And the federal government has reduced the money for staffing claims offices.

The strain on the system has intensified in recent months because about 1.5 million Americans have been added to jobless rolls since unemployment began surging last summer.

Today’s figures on claims for unemployment benefits led economists to assert that recovery, when it comes, will be a slow process.

“The significance of the job loss is that it limits recovery, “ Chimerine said.

That view was also supported by the latest survey of help-wanted advertising by the Conference Board, a New York-based business research group. The report found that job advertising in February fell to the lowest level since July, 1983, suggesting the labor market downturn will persist despite signs the recession is ending.

The widely followed help-wanted advertising index, a measurement of the volume of employment ads in newspapers nationwide, fell to 96 from 100 in February and 142 in February, 1990.

The help-wanted advertising index is considered a sensitive barometer of the economy’s overall direction since it indicates employer demand for a wide variety of jobs.