- Refugees at the Baton Rouge River Center are just a small
sample of the thousands that face a jobless as well as a homeless future.
Hurrican Katrina may cost 500,000 Americans their jobs this month, the
biggest decline in payrolls in more than 30 years and a loss that will
show up as early as next week in claims for unemployment benefits, economists
said.
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- "There are currently more than a million displaced
people, and I don't expect many of them to be back at work by the time
of the September payroll survey," said Ian Shepherdson, chief economist
at High Frequency Economics. Shepherdson estimated the drop in payrolls
this month may reach half a million, the biggest decline since December
1974.
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- Because Katrina struck at the end of the month, it didn't
influence August payrolls, which showed a 169,000 increase in jobs and
a drop in the unemployment rate to a four-year low of 4.9%, the Labor Department
said yesterday.
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- The ravaged Gulf Coast cities of New Orleans, Biloxi,
Mississippi and Mobile, Alabama, account for about one million jobs, according
to economists at Stone & McCarthy Research Associates.
-
- The government surveys businesses for the pay period
that includes the 12th of the month. A worker is considered employed if
he or she worked for at least one day during that time.
-
- "It is hard to imagine that too large a percentage
of these jobs will be sustained over the next few weeks," said Ray
Stone, managing director at Stone & McCarthy. "Perhaps several
hundred thousand" of the workers in the region won't be able to return
to their jobs soon enough to be counted as employed, he said.
-
- Some economists still expect payrolls to increase this
month. John Herrmann, director of economic commentary at Cantor Fitzgerald,
said he expects the hurricane to reduce payroll growth by about 100,000
jobs for the next month or two, followed by a rebound of about 200,000
jobs as rebuilding begins.
-
- "Near term, we look for a little bit of head winds
and then we should see the economy regain traction," he said in an
interview.
-
- Katrina will have a "tremendous" impact on
employment in the Gulf Coast region, Labor Secretary Elaine Chao said in
an interview. "It definitely will be devastating."
-
- Still, "we can hire people who don't have jobs now
and employ them in the recovery and cleanup" efforts, Chao said, adding
that she's confident all the lost jobs eventually will be restored or permanently
replaced with new ones.
-
- The effects of the storm on economic data will start
becoming apparent next week with the release of the weekly unemployment
claims figures, economists said.
-
- Meanwhile, economists are slashing their forecasts for
third-quarter economic growth, citing the aftermath of Hurricane Katrina.
-
- "Hurricane Katrina had a devastating impact on the
Gulf economy," Ethan Harris, Lehman Brothers' New York-based chief
U.S. economist wrote in a report. Harris lowered his prediction for the
current quarter's expansion to 3.8% from 4.1%.
-
- Katrina caused property damage of as much as $35 billion
in the South, making it the costliest U.S. natural disaster, according
to Risk Management Solutions. The death toll was put in the thousands by
officials and destroyed commerce along the Gulf Coast region, which produces
a third of the nation's oil, a fifth of its natural gas and handles 40%
of U.S. grain exports.
-
- Crude oil reached $70.85 a barrel on Aug. 30, the highest
since futures trading began at the New York Mercantile Exchange in 1983.
It is up 3.2% this week and 55% in the past year.
-
- Gas futures surged 21% this week. U.S. two-year Treasuries
had their biggest weekly gain since 2002, pushing yields down to 3.75%
from 4.07%.
-
- Meanwhile, stocks were largely unchanged after a turbulent
week. The Dow was down 12.26 to 10,447.37 while the Nasdaq was down slightly,
giving up 6.83 to 2,141.07.
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- Stocks closed higher for the week, led by a rally in
energy companies.
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- Bloomberg News
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