Source:  Reuters

The number of U.S. workers filing new claims for jobless benefits hit a 26-year high last week and factory orders plummeted in December, data showed on Thursday, illustrating an economy mired deep in recession.

In addition, the number of people staying on the jobless benefit rolls hit a record high late last month.

“The economy is suffering. Things are getting worse, not better. Everything is weakening at a faster pace than we have ever seen. You don’t need to embellish many words about that,” said Brian Fabbri, North America chief economist at BNP Paribas in New York.

The Labor Department said first-time claims for state unemployment insurance benefits rose 35,000 to 626,000 in the week ended January 31, well above the level Wall Street had expected and the highest since October 1982.

U.S. stocks opened lower on the data, but later pushed higher on the back of a rise in semiconductor shares and above-forecast sales from retailer Wal-Mart. U.S. government bond prices rose, with the report viewed as further confirmation that the year-long recession was deepening.

The housing-led downturn is having a devastating impact on jobs, further squeezing households whose net worth has also been eroded by the stock market collapse.

With consumers drastically cutting back on spending, companies are responding to the slump in demand by further reducing their payrolls.

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