Hurricane Rita Spurs Another Surge in Jobless Claims

- Initial Jobless Claims for last week rose to 390K versus estimates of 350K and an upwardly revised 369K the prior week.
- Continuing Claims rose to 2905K versus estimates of 2819K and a downwardly revised 2787K prior.

BOTTOM LINE: The number of Americans filing first-time claims for jobless benefits rose unexpectedly last week as workers displaced by Hurricane Rita joined Katrina’s victims, Bloomberg reported. About 70,000 claims were related to Katrina. The four-week moving-average of claims rose to 404,500 from 388,750 the prior week. The insured employment rate, which tracks the US unemployment rate rose to 2.3% from 2.2% the prior week and 2.0% before the hurricanes. Rita’s effects appear to be larger than most expected. I still expect jobless claims to begin heading lower again next week. Tomorrow’s jobs report will be ugly, but is likely factored in at this point.