Quick Hits: Hurricanes Blow In, Jobs Blow Out
Brief scrutiny of today's headlines.
Hurricanes Ike and Gustav blew through a weakening economy, sending new claims for unemployment benefits to a 7-year high.
The US Labor Department says new requests for unemployment benefits for the week ending September 20th increased by 32,000 to a seasonally adjusted 493,000. Analysts expected 445,000.
The two major hurricanes resulted in about 50,000 new claims in Louisiana and Texas.
The four-week moving average, a better gauge because it evens out spikes and dips, rose to 462,500, the Labor Department says.
Weekly jobless claims have exceeded 400,000 for 10 weeks. A year ago, the total was 309,000.
The number of workers continuing to receive unemployment benefits last week was 3.54 million, up 63,000 from the previous week and close to a 5-year high. The 4-week average of continuing claims was 3.49 million.
The credit crunch, declining home prices and slugging consumer spending have combined to slow the economy. The unemployment rate in August was 6.1%, the highest level in five years.
The highest insured unemployment rates in the week ending September 6th were in Puerto Rico (4.9%), New Jersey (3.3), California (3.2), Michigan (3.2), Oregon (3.2), Nevada (3.1), Pennsylvania (3.1), South Carolina (3.1), Rhode Island (2.9), and Arkansas (2.8), the Labor Department reported.
The largest increases in initial claims for the week ending September 13th were in Louisiana (+18,409), Florida (+4,863), California (+4,679), South Carolina (+2,562), and Kansas (+2,397), while the largest decreases were in Wisconsin (-2,373), Arkansas (-550), Indiana (-508), North Carolina (-479), and Iowa (-429).
Some companies are cutting back. Last week, Schering-Plough (SGP), a pharmaceutical company, announced plans to cut 1,000 sales jobs. Pilgrim's Pride (PPC), a chicken producer, said it would cut 100 jobs in addition to the 600 job cuts previously announced. General Electric (GE) cut its earnings outlook for the third quarter and the year. Northwest Airlines (NWA) and Delta Air Lines (DAL) plan to cut jobs as part of a planned merger.
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