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New Jobless Claims Hit 26-Year High

The U.S. government is delivering more bad news on the country's struggling economy, saying first time claims for unemployment benefits are at a 26-year high.

The Labor Department report, issued Thursday, said the number of laid-off workers applying for benefits for the first time soared to 626,000 last week.

Officials said the total number of workers receiving unemployment benefits is now close to 4.8 million, another record.

A comprehensive government report on unemployment is due out Friday. Economists surveyed by news organizations predict the nationwide jobless rate will rise three-tenths of a percent to hit 7.5 percent.

Despite the rising claims for unemployment insurance, U.S. companies are squeezing more productivity out of their shrinking workforces.

A second Labor Department report Thursday said productivity - a measure of how much an employee produces per hour - rose more than three percent for the last three months of 2008.

Some information for this report was provided by AP and Reuters.