Initial Jobless Claims Rise To 7-Year High

Washington, DC, Oct. 2, 2008-- Initial jobless applications rose to the highest level in seven years as more Americans were thrown out of work in the aftermath of the Gulf Coast hurricanes and employers cut staff to meet slowing demand.

Claims increased 1,000 to 497,000 in the week that ended Sept. 27, from a revised 496,000 the prior week, the Labor Department said today in Washington. The total number of people collecting benefits was the highest since 2003.

Mounting job losses spawned by the biggest housing recession in a generation undermined consumer spending even before the latest financial meltdown threatened to magnify the slump. The government may report tomorrow that the economy lost jobs in September for a ninth consecutive month.

Initial claims were estimated to decrease to 475,000 from 493,000 initially reported for the prior week, according to economists. Estimates ranged from 432,000 to 525,000.

Claims figures in recent weeks have been distorted by the fallout from Hurricanes Gustav and Ike that hammered the coasts of Texas and Louisiana and forced the evacuation of more than 2 million people from eastern Texas.