Associated Press
WASHINGTON — Fallout from the terror attacks is rippling through the economy, catapulting new claims for unemployment benefits to a nine-year high.
Layoffs mounted for workers in travel and tourism last week, and economists believe the jobless picture will get worse in coming months.
Even before the attacks, the nation’s unemployment rate had risen 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.
Today, the government will release its first monthly employment report since the Sept. 11 attacks. Many economists are expecting the report will show that the jobless rate climbed to 5 percent in September, and businesses slashed payrolls by at least 100,000.
Mark Zandi, chief economist at Economy.com, estimated that over the next six months a net 500,000 more jobs are likely to be lost, after taking into account jobs created during the period. The unemployment rate could rise to 6 percent by year’s end.
For the workweek ending Sept. 29, new jobless claims soared by a seasonally adjusted 71,000 to 528,000, the Labor Department reported Thursday.
That came on top of a 64,000 increase the week before, which many analysts believe represented the first wave of layoffs coming from the Sept. 11 disaster.
"We’ll see continued high levels of layoffs for a while," predicted Gary Thayer, chief economist for A.G. Edwards &Sons. "We are headed into a period of economic weakness that is going to be more severe than it’s been up to now."
The last two sharp increases in jobless claims reflect the toll the attacks in New York and Washington, D.C., are having on a labor market that was already suffering because of the country’s more than yearlong economic slump.
New claims are at the highest point since July 25, 1992.
The four-week moving average, which smoothes out week-to-week fluctuations, rose last week to 453,500, the highest level since Dec. 28, 1991.
In another report, companies announced plans to cut 248,332 jobs in September, a record monthly high, according to outplacement firm Challenger, Gray &Christmas. Of that total, 200,807 layoffs were announced after the attacks.
With new uncertainties raised by the attacks and many economists saying a recession this year is unavoidable, businesses will be reluctant to hire new workers, analysts said.
Manufacturing has been hardest hit by the slowdown and had cut roughly 1 million jobs before the attacks. In the aftermath, the industrial sector probably will continue to post weak sales and to shed workers, analysts said.
In another report, orders to American factories were virtually flat in August, decreasing to $332.6 billion, after dipping by 0.1 percent in July, the Commerce Department said.
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