WASHINGTON — Hopes that the economy may be poised for a recovery got a splash of reality Thursday: The unemployment rolls are still getting bigger as the recession maintains its grip.
For the 10th week in a row, the number of people receiving jobless benefits grew. It now stands at nearly 5.6 million, the government said — an indication that the labor market is still grim.
New claims for unemployment benefits rose again as well, to a seasonally adjusted 652,000, up from 644,000 the week before. The government also said the economy shrank at a 6.3 percent annual clip in the fourth quarter, slightly faster than its previous estimate.
“There is no sign of recovery here, and claims are usually one of the very first numbers to turn,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a client note.
The total number of people claiming benefits jumped to 5.56 million, worse than economists’ projections of 5.48 million, and setting a record for the ninth week in a row.
The stock market shook off the bleak unemployment news and continued its remarkable bounce off lows set earlier this month. The Dow Jones industrials gained almost 175 points to close just under 7,925.
Some economists believe the economy is contracting this quarter, which ends next week, even faster than it did late last year, while others think the shrinking may have slowed. No one disputes that the recession persists.
Many economists expect the gross domestic product will contract again in the April-June period, but by a smaller amount, in the 2 to 3 percent range, and maybe turn back toward growth later in the year.
Nariman Behravesh, chief economist at IHS Global Insight, expects an economic contraction at an annual pace of as high as 8 percent this quarter. “On the other hand,” he added, “the worst of the worst is probably behind us.”
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