New job numbers indicate uptick

• Article
• Comments ()
• Click-2-Listen
• Videos

By

The job market snapped back last month with the addition of 215,000 jobs after a lull caused by Hurricane Katrina, the Labor Department reported yesterday.

While the number of new jobs was about average for a month in the United States with the unemployment rate at 5 percent, it cheered political leaders and others worried about a long-lasting impact from the nation's worst storm.

President Bush, who was hurt by public doubts about the economy and a fall in consumer confidence after the hurricane, heralded the improvement yesterday.

"We have every reason to be optimistic about our economic future," Mr. Bush said. "This economy is in good shape."

Katrina put nearly 600,000 people out of work, primarily in the flooded New Orleans area. The unemployment rate for the 900,000 people evacuated from the impact area remains high at 20.5 percent, the department said, but is 12.5 percent for those who returned to the city of New Orleans.

The report showed that outside the stricken areas, the job market remained robust and generated enough jobs to quickly overcome the shortfall caused by the storms.

"We are back on track," said Stuart Hoffman, chief economist at PNC Financial Services Group. "The job market has clearly recovered from the setbacks and dislocations caused by the series of hurricanes."

Federal Reserve Chairman Alan Greenspan also expressed satisfaction with the economy's resilience.

"Despite the disruptions of Hurricanes Katrina, Rita and Wilma, economic activity appears to be expanding at a reasonably good pace as we head into 2006," he told a conference in Philadelphia.

The financial markets reacted with caution, however, fearing the resumption of healthy job growth could prompt the Fed to raise interest rates further. The Dow Jones Industrial Average declined 35 points to 10,878.