Jobless Claims Rise Due To Hurricane Gustav

By: AP
By: AP

New applications for unemployment benefits rose unexpectedly last week due to the impact of Hurricane Gustav, the government said Thursday.

The Labor Department reported that initial jobless claims rose to a seasonally adjusted 455,000, up 10,000 from the prior week. Analysts had expected claims to fall slightly to 440,000.

A Labor Department analyst said last week's number is the first to include claims stemming from job losses caused by Hurricane Gustav, which slammed into the Louisiana coast over the Labor Day weekend. Louisiana was unable to report actual claims until last week, the analyst said.

The department wouldn't give a precise estimate of the impact of the hurricane, but said claims would have fallen without it.

The four-week average of new claims, which smooths out fluctuations, rose by 5,000 to 445,000.

The number of people continuing to receive unemployment benefits dropped 55,000 to 3.48 million. The four-week average increased to 3.46 million, the highest in almost five years.

The figures reflect ongoing weakness in the job market. Economists consider initial claims above 400,000 a sign of a struggling economy. A year ago, the figure stood at about 320,000.

Thursday's figures were compiled before Lehman Brothers Holdings Inc. filed for bankruptcy Monday and before Merrill Lynch & Co. Inc. agreed to be acquired by Bank of America Corp.

Those moves could put thousands of jobs at risk. Lehman has approximately 25,000 employees worldwide and Merrill Lynch has 60,000.

The Labor Department said earlier this month that the unemployment rate jumped to 6.1 percent in August, the highest level in five years.

Employers cut payrolls by 84,000 in August, the eighth straight month of cuts, the department said. So far, 605,000 jobs have been eliminated this year, and some economists estimate that figure could grow to 1 million by year-end.

Several companies have announced layoffs in the past week. Hewlett-Packard Co. said Monday it plans to cut 24,600 jobs over the next three years, or 8 percent of its work force.

Newspaper chain McClatchy Co. and software developer Corel Corp. have also announced layoffs in the past week.

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