Americans seeking employment benefits at 6-year high

The number of Americans seeking jobless benefits hit a six-year high in the most recent period, a sign that U.S. workers are feeling the pinch of a slowing economy.

On Thursday, the U.S. Department of Labour said that 455,000 Americans filed for employment benefits in the week ended Aug. 2. That figure represented an increase of two per cent over the previous week and was the highest number of filers since March 2002.

Using a four-week average, 419,500 men and women were looking for jobless benefits, the highest level since July 2003.

The rising number of employment benefits seekers is another indication that the U.S. labour market is becoming a more difficult place.

On Friday, the U.S. unemployment rate was pegged at 5.7 per cent, a five-year high.

Economists predict the rate could hit 6.5 per cent by the middle of next year.

A terrible real estate market combined with a slumping auto sector has companies cutting jobs. In recent weeks, General Motors Co, forestry giant Weyerhaeuser Co. and Starbucks Corp. have pared their workforces.

In Canada, the employment picture appears brighter.

Statistics Canada is set to release the July unemployment numbers for Canada tomorrow. But the current rate, 6.2 per cent, has been pretty stable for 12 months.

Last June, Canada's unemployment rate stood at 6.2 per cent.

BMO Economics forecasts that the national jobless rate will rise slightly over the next few months, to 6.4 per cent by the second half of 2009.

If that prediction holds true, however, that would mean this country's jobless rate will be lower than the U.S. level by next spring.

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