10,000 Katrina-related jobless claims filed last week

Thursday, Sept. 8, 2005 | 9:45 a.m.

WASHINGTON -- An estimated 10,000 workers who lost their jobs because of Hurricane Katrina filed for unemployment benefits last week, the first wave of what likely will be hundreds of thousands of displaced workers seeking benefits.

The Labor Department said today that the 10,000 figure was an estimate of the number of disaster-related claims based on spot checks with claims offices in Louisiana, Mississippi, Alabama and neighboring states such as Texas who have agreed to accept benefit applications from workers who have relocated from the hurricane areas.

Overall, a total of 319,000 newly laid off workers filed for claims last week, a slight drop of 1,000 from the previous week.

However, department analysts cautioned that that the big-picture figure would have been higher except for the fact that many claims offices in the path of the hurricane were shut down. They predicted the number of disaster-related claims will rise sharply in coming week.

The Congressional Budget Office on Wednesday forecast a total of 400,000 lost jobs in coming months as a result of what is expected to be the costliest natural disaster in U.S. history. That would mean that the 600,000 to 800,000 payroll jobs that the economy was expected to create from September through December will be cut by half or more.

Economists will be closely watching the department's weekly jobless claims report for any signs that the impact on employment from Katrina could become even more serious.

The concern is that consumers, who account for two-thirds of total economic growth, could suddenly reduce their spending because of the rising cost of gasoline and other energy products. In such an event, the drag on the economy could be larger than is currently being forecast.