WASHINGTON – New claims for unemployment benefits shot up last week to the highest level in nine years as layoffs from the terror attacks took their toll on the travel and tourism industries.
The Labor Department reported Thursday that for the work week ending Sept. 29, new jobless claims jumped by a seasonally adjusted 71,000 to 528,000. That came on top of a 64,000 increase in claims the week before, which pushed claims to levels not seen since 1992.
The sharp rise in claims over those two weeks reflects the rippling impact the Sept. 11 attacks in New York and Washington are having on a labor market that was already suffering because of the country's more than yearlong economic slump.
The big advance in the latest claims figures, a government analyst said, in part comes from layoffs in the airline, tourism and other travel-related businesses.
The level of claims for this week and the week prior are at the highest point since July 25, 1992.
The four-week moving average of claims, which smoothes out week-to-week fluctuations, rose last week to 453,500, the highest level since Dec. 28, 1991.
Since the attacks, more than 100,000 layoffs have been announced, consumer confidence has plunged and billions of dollars worth of business has been lost.
With new uncertainies raised by the attacks and many economists predicting a recession this year is unavoidable, businesses will be reluctant to hire new workers in the months ahead, analysts say.
The unemployment rate shot up to 4.9 percent in August from 4.5 percent, the biggest one-month jump in more than six years as businesses eliminated 113,000 jobs.
On Friday, the government will release its first monthly employment report since the attacks. Many economists are expecting the report will show that the jobless rate climbed to 5 percent in September and businesses will slash payrolls by 100,000.
But those forecasts, analysts say, are likely to underestimate the damage stemming from the attacks. The employment picture, they predict, will look worse in the coming months as the full impact of the attacks, along with the weakening U.S. economy, show up in labor statistics.
For the work week ending Sept. 22, 39 states and terrorities reported an increase in claims and 14 reported a decrease. The state information lags a week behind the national figures and is not seasonally adjusted.
New York saw the biggest jump in claims — by 10,717 — reflecting layoffs in the trade, service, financial and recreation businesses. The government said that 4,800 of those claims were directly related to the World Trade Center disaster.
California saw claims rise by 9,337 from layoffs in the service and agriculture businesses, and Michigan reported a 7,703 increase as automobile and transportation equipment companies laid off workers.