WASHINGTON — The number of out-of-work Americans drawing unemployment benefits has surged to a 25-year high, while shoppers turned extra frugal, further proof of the damage from sinking economy, credit problems and financial stresses.
The Labor Department reported Thursday that the number of people continuing to draw unemployment benefits jumped by 122,000 to 3.84 million in late October, well above analysts' estimates of 3.74 million. That was the most since late February 1983, when the country was struggling to recover from a long and painful recession. The year-ago tally was 2.59 million people.
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The work force was much smaller in February 1983, when the number of people continuing to claim benefits was 3.88 million. At that time, about 87.2 million Americans were in the work force, compared with almost 134 million today. That's one reason the unemployment rate was 10.4 percent in February 1983, compared with 6.1 percent last month.
Still, the increase in continuing claims indicates fewer people are leaving the rolls as newly laid off workers are added.
Americans hit by layoffs, shrinking nest eggs and other stresses are pulling back even more, sending sales at many big retailers down in what might have been the weakest October in decades. That further darkened the outlook for the holiday sales season.
Target Corp. and Costco were among the many retailers reporting sales declines last month. Wal-Mart Stores Inc., the world's largest retailer, logged a sales gain.
On Wall Street, stocks slumped again as concerns about widespread economic weakness sent major indexes down more than 4 percent Thursday. The Dow Jones industrial average tumbled more than 440 points.