The number of Americans filing unemployment claims has jumped to a 26-year-high, indicating the US has fallen deeper into recession.
The Labor Department said on Wednesday that the number of American workers filing initial claims for unemployment benefits climbed to 586,000 in the week ended Dec.20, increasing by 30,000 from one week earlier.
It marked the highest rise in the number of jobless claims filed since the week ended Nov. 27, 1982, when claims reached 612,000.
The economic downturn and weakening demand have forced companies to cut more jobs and reduce benefits in a desperate attempt to keep their businesses running.
Increasing lay-offs in the auto industry, which has been deeply affected by the financial crisis, also pushed the four-week average of new jobless claims to 558,000 from 544,250 the week before, the highest level since December 1982.
The US Commerce Department reported that consumers cut spending for the fifth consecutive month in November.
Spending contracted by 0.6 percent in November after falling 1 percent in October. American income also shrank by 0.2 percent after a slight 0.1 percent October gain.
According to Reuters, almost 2 million workers have lost their jobs this year across the US, driving the unemployment rate to 6.7 percent.
AKM/HGH