updated 7/31/2008 9:12:26 AM ET 2008-07-31T13:12:26

The number of Americans filing claims for unemployment benefits jumped last week to the highest level in five years, reflecting in large part a new government outreach effort to locate people eligible for benefits.

Major Market Indices

The Labor Department reported Thursday that the number of applications for jobless benefits soared to 448,000, an increase of 44,000 from the previous week. That was far worse than the decline of 8,000 that economists had been expecting.

However, the government attributed much of the big jump to a special outreach program to notify people that they could qualify for up to 13 weeks of additional benefits because of legislation Congress passed in June.

When people came in to apply for the extended benefits, state claims officials discovered that many of them were eligible for another round of initial claims because they had held jobs for a brief period after exhausting their original benefits.

Labor Department officials said that these special factors played a big role in pushing claims higher last week. The jump was the biggest one-week increase since claims soared by 94,000 the week of Sept. 10, 2005, following a wave of layoffs in the wake of the devastation from the Gulf Coast hurricanes that year.

The overall total of 448,000 claims for last week surpassed the previous high for the current slowdown of 406,000 in late March. It was the highest claims level since they totaled 450,000 the week of April 19, 2003, a period when the country was struggling through a jobless recovery following the 2001 recession.

The economy is being battered by a severe slump in housing which has triggered heavy layoffs in construction and related industries. Also, overall economic weakness and a surge in gasoline prices has resulted in heavy layoffs among auto manufacturers who have seen demand slump for their once-popular trucks and sport utility vehicles.

The government will report on the employment picture for July on Friday. Many economists believe that report will show the jobless rate edged up to 5.6 percent in July from 5.5 percent in June. Economists are looking for businesses to have cut jobs for a seventh straight month, and project that payroll employment will fall by 72,000 following a loss of 62,000 in June.

General Motors Corp. officials said this week that they plan to cut 15 percent of their U.S. and Canadian salaried work force — or around 5,100 jobs — as part of a program to slash billions of dollars in costs.

Also Starbucks Corp., which already planned to shut 600 of its stores, said it will cut almost 1,000 office jobs, which will include an expected 550 layoffs as it deals with falling sales.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 2.79%
$30K home equity loan FICO 5.78%
$75K home equity loan FICO 4.54%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.57%
13.57%
Cash Back Cards 17.91%
17.91%
Rewards Cards 17.15%
17.15%
Source: Bankrate.com