Weekly Jobless Claims Pushed Higher by Hurricanes

The number of people thrown out of work from Hurricanes Katrina (search) and Rita rose to 363,000 last week as the adverse economic effects of the Gulf Coast (search) hurricanes continued to mount.

The Labor Department reported that an additional 74,000 hurricane-related claims for unemployment benefits were filed last week, up from 70,000 the previous week. For the first time, the claims figures included people who lost their jobs because of Hurricane Rita, which hit the Texas Gulf Coast in early September after Katrina struck Louisiana and Mississippi on Aug. 29.

The hurricanes devastated portions of the Gulf Coast, including New Orleans, and have also slowed economic growth nationwide, primarily by pushing energy prices higher as oil platforms and refineries along the Gulf Coast were shut down.

The Labor Department said that jobless claims overall rose by 21,000 last week to 390,000 on a seasonally adjusted basis.

The 74,000 hurricane-related claims are included in the overall claims number. Labor Department analysts said most of those claims still reflected Katrina claims but they said layoff claims related to Rita were also included. However, because of the way the data was collected, they said they did not have a specific breakdown between Katrina and Rita.

The jolt to the economy being demonstrated through the weekly jobless claims numbers is expected to be magnified on Friday when the government releases the unemployment report for September.

Some analysts said the unemployment report could show a loss of as many as 400,000 jobs for the month although the consensus view was for a drop of 172,000 jobs as job losses in the hurricane devastated areas were offset by job gains in the rest of the country.

Analysts were forecasting that the unemployment rate, which had fallen to a four-year low of 4.9 percent in August, will rise to perhaps 5.1 percent in September.

While private economists believe the economic hit from the hurricanes will shave as much as a full percentage point from economic growth in the second half of this year, the Congressional Budget Office released an updated assessment last week which put the impact at a smaller half-point reduction in growth.

The CBO said most of the slowdown would be seen in the just-completed July-September quarter with growth picking up in the fourth quarter as rebuilding gets under way.

The CBO estimated that the hurricanes could cut job growth by between 280,000 and 400,000 although it predicted job gains next year from increased employment related to the massive amount of rebuilding of homes and businesses that will be required to recover from the storms.

For the week ending Sept. 24, the state with the biggest increase in claims was Mississippi, a gain of 3,705, with all claims related to Katrina.

Claims were up 2,590 in Michigan due to layoffs in the auto industry and Katrina-related claims. Michigan is one of the states that is taking jobless claims filings from people laid off by the Gulf Coast hurricanes to help clear a processing backlog in the affected states.