More Bad News

September 15, 2005

The news coming from the Labor Department Thursday was disappointing, but not unexpected.

Initial claims for unemployment last week jumped by 71,000 to 398,000. About 68,000 of the claims were related to Hurricane Katrina as Texas, Louisiana and Alabama posted the greatest increase in initial claims.

Texas and Alabama reported that the majority of their 7,847 new claims came from evacuees who have temporarily relocated there. Louisiana did not characterize its 5,435 new claims. As many as 500,000 people could be unemployed as a result of the hurricane.

In another development, consumer inflation jumped 0.5 percent last month with energy prices skyrocketing by the largest amount in more than two years in advance of the hurricane.

Also consider that a report placed the seasonally adjusted unemployment rate in the New Orleans, Metairie and Kenner area of Louisiana at 4.9 percent in July. How high could the jobless rate go in that area? The answer: 25 percent.

In addition, inflation is expected to worsen this month due, in large part, to soaring gasoline prices.

By Glenn J. Kalinoski, Executive Editor, Customer Inter@ction Solutions