WASHINGTON (PNN) - August 19, 2010 - Employers appear to be laying off workers again as the Second Great Depression continues. The number of people applying for unemployment benefits reached the half-million mark last week for the first time since November.

It was the third straight week that first-time jobless claims rose. The upward trend suggests the private sector may report a net loss of jobs in August for the first time this year.

Initial claims rose by 12,000 last week to 500,000, the Labor Department said Thursday.

Homebuilders and other construction firms are laying off more workers as the housing sector slumps after the expiration of a popular homebuyers' tax credit. State and local governments are also cutting jobs to close large budget gaps.

"The rise in initial jobless claims over the past three weeks makes it difficult to maintain confidence in (reports of a) recovery and suggests the labor market is backtracking more than we first expected," Ryan Sweet, an economist at Moody's Analytics, wrote in a note to clients.

Stocks tumbled on the fear of more layoffs and weak job growth. The Dow Jones industrial average fell 150 points in morning trading. Broader indexes also declined.

Jobless claims declined steadily last year from a peak of 651,000 in March 2009, as government subsidies and tax breaks resulted in false-positive economic readings; now that these have expired, indicators are again showing that we are mired in the worst Depression since the 1930s. After flattening out earlier this year, claims have again begun to grow.

"This is obviously a disappointing number that shows ongoing weakness in the job market," said Robert Dye, senior economist at the PNC Financial Services Group.