Jobless claims at highest since 9/11

The number of out-of-work Americans filing claims for unemployment insurance rose to its highest since just after the 2001 terrorist attacks. Last week's increase to 497,000 is yet another sign of the declining labor market.

After yesterday's bad news from the U.S. Labor Department, economists and others are bracing for today's monthly Labor Department jobs report, with some predicting that the economy will have shed about 100,000 jobs last month.

The nation's employers already cut jobs every month this year through August - 605,000 in all.

"It's going to be a slaughter," Cheryl Spaulding, president of Joseph's People, a Downingtown volunteer organization that helps the unemployed find jobs, said of today's report.

"People are in their foxholes, keeping their heads down, hoping they won't lose their jobs," she said.

The September unemployment rate also will be a focus: It climbed a hefty four-tenths of a percentage point in August to 6.1 percent.

Today's Labor Department report - released monthly - charts the total number of employed people and the behavior of companies.

Yesterday's report, released weekly, measures the actions of jobless individuals as they file for unemployment benefits.

Initial benefit filings in the week ended Saturday rose 1,000 to a seasonally adjusted 497,000 - the highest since a few weeks after the Sept. 11, 2001, terrorist attacks, when 517,000 filed.

A year ago, initial filings numbered 324,000.

"It's too soon to measure the impact of the current crisis on the real economy - on actual jobs," said Stephen Herzenberg, executive director of the Keystone Research Center, an economic-consulting group in Harrisburg.

"It may take several weeks or months for the fallout from September's Wall Street turmoil to hit the employment numbers," agreed John A. Challenger, chief executive of Challenger, Gray & Christmas Inc., an outplacement firm in Chicago, in a statement released yesterday.

Challenger predicted employment would remain in flux as some financial institutions were bailed out by the government, some were acquired by other banks, and others were being liquidated.

"While all of these scenarios are being played out," he said, "the fate of the workers remains in limbo."

The Labor Department estimated in yesterday's report that 45,000 of the 497,000 claims were related to the effects of Hurricane Gustav in Louisiana and Hurricane Ike in Texas, both of which occurred last month.

More reliable in showing trends than the weekly report on initial claims is what is known as the four-week moving average. This week's high number has pushed the four-week average up to 474,000 from last week's 462,500.

Unemployment "has been slowly building as more and more firms have decided things aren't going to turn around," said Joel Naroff, of Naroff Economic Advisors, of Holland. "I'm expecting it to be fairly ugly," said Naroff, who is forecasting a September decline of 75,000 jobs.

State figures lag a week behind national statistics. For the week ended Sept. 20, 9,887 initial claims were filed in New Jersey, up 539 from the prior week and 1,913 from the prior year.

There are now 125,727 people receiving unemployment insurance in New Jersey, up 26,521 from the prior year, although down 2,576 from the previous week.

In Pennsylvania, initial claims were down 867 week over week to 19,725. However, that is up 4,542 from the previous year.

Currently, there are 165,216 receiving unemployment benefits, up 36,172 from the previous year, but down 6,355 from last week.