Unemployment highest since post-Sept. 11
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10/2/2008 -
PHILADELPHIA — 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.Now economists and others are bracing for today's monthly jobs report from the U.S. Labor Department, with some predicting the economy shed about 100,000 jobs in September.
The nation's employers had 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 Downington, Pa., 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 0.4 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.
Thursday's report, released weekly, measures the actions of jobless individuals as they file for unemployment benefits.
Initial benefit filings in the week ending last Saturday rose by 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, Pa.
"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, an outplacement firm in Chicago, in a statement released Thursday.
Challenger predicted employment would remain in flux as some financial institutions are bailed out by the government, some are acquired by other banks and others are being liquidated.
"While all of these scenarios are being played out, the fate of the workers remains in limbo," he said.
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 in September.
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, chief economist with Commerce Bank in Cherry Hill.
"I'm expecting it to be fairly ugly," said Naroff, who is forecasting a September decline of 75,000 jobs.
