Unemployment Rates Could Surge Far into 2010

STRAIGHT TO THE POINTS
– Job losses are likely to continue mounting through middle of 2010.
– Jobless claims have already surpassed the half million mark in 2009.
– Surge in new claims due to those who delayed filing claims over the holidays.

New jobless claims soared past the half million mark last week jumping up more than 54,000 for the week ending January 10th. Experts say the worst holiday season in forty years coupled with a faltering economy will likely prompt more layoffs in the near future.

Prospects look dim even if the economy begins to grow again in the second half of this year, according to Charles L. Evans, head of the Federal Reserve Bank of Chicago.

Job losses are likely to continue mounting into the middle of 2010, according to Evans.

The figures came out the day after retail sales were reported to be sharply down in December.

The last time jobless claims exceeded the half-million mark was the week that ended Dec. 20, when claims surged to a 26-year high of 589,000, according to CNN Money.

Ian Shepherdson, an economist with High Frequency Economics in New York, believes that jobless claims will rise and he doubts that the peak in claims will be reached before the fall of 2009.

The Labor Department indicated that first-time requests for unemployment insurance jumped to a seasonally adjusted 524,000 last week, far above analysts' expectations of 500,000 new claims.

Much of the increase is attributed to a flood of requests from newly laid-off people who delayed filing claims over the holidays, according to the Labor Department.