Unemployment claims, already well into recession territory, are rising even faster than expected, leading economists to warn Thursday that the worst is yet to come.

As the Labor Department released bleak new numbers on the job market, Goldman Sachs, Chrysler and Xerox all announced they were cutting workers by the thousands, adding to the woes of an economy beset by tighter credit and wobbly banks.

The government said new applications for unemployment insurance rose 15,000 last week to a seasonally adjusted 478,000, above analysts’ estimates of 470,000. Jobless claims above 400,000 are considered a sign of recession.

The Commerce Department will release its first estimate of third-quarter economic performance Oct. 30, and Wall Street analysts project it will show the economy contracted by 0.5 percent, according to Thomson/IFR.

Many economists expect the decline to continue into the current quarter and the first three months of 2009, if not longer. The classic definition of a recession is at least two consecutive quarters of negative growth.

The impact of the job losses is rippling through the economy. As jobs disappear, foreclosures rise when out-of-work homeowners can no longer make mortgage payments.

Home foreclosure filings jumped by 70 percent in the third quarter, according to the listing service RealtyTrac Inc. Nationwide, nearly 766,000 homes received at least one foreclosure-related notice from July through September, the company said.

Spending is falling, too. Americans who still have jobs are worried about keeping them, and those who have lost jobs must watch every penny. Consumer spending accounts for about 70 percent of the economy, and economists estimate it fell by more than 3 percent last quarter in what would be the first quarterly drop in 17 years.

A dismal report at best, but the almost $1 trillion  should slow this from happening….if you buy that…then there is this bridge that is for sale.  I am afraid the worse is yet to come.