- The Washington Times - Friday, October 5, 2001

New claims for unemployment benefits shot up by 71,000 to a nine-year high of 528,000 last week in the latest economic fallout from the Sept. 11 terrorist attacks.
Jobless claims now are at recession levels, while layoff announcements last month hit a record high of 248,332, prompting President Bush yesterday to call for an extension of unemployment benefits and $3 billion in aid for people who lost work in the wake of the attacks.
"We hear the cries of the people who were laid off," Mr. Bush said in an address to Labor Department employees, announcing a list of benefits the department is making available to the 3.4 million Americans on the unemployment rolls.
"It's clear as a result of today's new unemployment claims that the attack of September the 11th sent a shock wave throughout our economy," he said. "And we need to do something about it."
The more than half-million people who filed for unemployment benefits last week tops the number that filed during any week of the last recession in 1990-91, said Steve Cochran, an analyst with Economy.com.
"These figures should erase any doubt that the economy is in recession," he said. The layoffs have affected a wide swath of workers in trade, services, travel and hospitality, recreation and finance. More than 10,000 of the increased unemployment claims were filed in New York alone, and about half of those were directly related to the attacks, the Labor Department said.
The record number of layoff announcements last month reflected plans for big job cuts laid out by airline and aerospace companies in the wake of the attacks. It means that even higher unemployment is on the way because many of those targeted for job cuts have not received notice or filed claims, according to Challenger, Gray & Christmas, a Chicago outplacement firm.
Few of the big job cuts in the last two weeks will be reflected in a September jobs report due out today from the Labor Department, economists said. That report is based on a survey conducted the week of the terrorist attacks, when both hiring and firing activity appeared to grind to a halt.
Even so, economists believe the unemployment rate rose to a four-year high of 5 percent even before the attacks as the result of a deep recession in manufacturing and technology in the past year.
David Orr, chief economist with First Union bank, said last week's jump in jobless claims shows that layoffs are really starting to hurt. But he noted that as a percentage of the 132.2 million of employed Americans, the number of people filing for claims is not as great as the high reached in the last recession.
Because the current labor force is much larger than it was a decade ago, claims would have to reach a weekly high of 575,000 to equal the percent out of work during the 1991 recession, he said, and would have to hit 875,000 to be as severe as the 1981 recession.
Mr. Bush is proposing a 13-week extension of unemployment benefits for workers laid off since the attacks, in states which experienced a 30 percent spike in unemployment or were declared disaster areas in the last month. Workers in most other states are eligible for only 26 weeks of benefits.
Several states severely affected by the attacks, including Virginia, New York and California, already have waived the usual two-week waiting period for attack victims, enabling them to begin drawing unemployment checks immediately. That has led to a 135,000 jump in claims just in the last two weeks.
Mr. Bush also is making $3 billion in emergency grants available to the attack victims to help them purchase health coverage, receive job training and supplement their incomes. Those grants were authorized in a $40 billion assistance package approved last month by Congress.
The augmented benefits would not be available to the millions of manufacturing and other workers already drawing unemployment benefits before the attacks. For those workers, the president noted that more than $17 billion is already available under existing programs for job training, health insurance and other expenses.
Congressional Republicans generally supported Mr. Bush's proposals yesterday, but Democrats said they did not go far enough and should cover more workers. The exact amount of new unemployment benefits is expected to be negotiated as part of a $60 billion to $75 billion-a-year economic-stimulus package.

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