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Storm-related jobless claims up

GDP showed solid growth in quarter before hurricanes

WASHINGTON -- The number of people out of work because of Hurricane Katrina has reached 279,000, and many more job losses are expected because of Hurricane Rita.

The lost jobs, coupled with surging energy prices, are expected to deliver a sharp blow to overall economic growth in the second half of this year. Also of concern is the possibility that any further unexpected spikes in energy prices could prolong the economic weakness.

The Commerce Department reported yesterday that the economy was growing at a solid 3.3 percent annual rate in the April-June period, but that rate is sure to be weaker in the just-concluding July-September quarter.

''The problem is the combined effects of the disruptions from Katrina and Rita, plus the ripple effects in the economy from higher energy prices," said Nariman Behravesh, chief economist at Global Insight, a consulting firm in Lexington, Mass.

Before the hurricanes sent oil prices briefly above $70 per barrel and gasoline up to $3 per gallon, analysts had forecast that economic growth in the third quarter would show an annual rate perhaps as high as 4.5 percent.

Behravesh said he now believed growth in the gross domestic product, the measure of the value of all goods and services produced in the nation, would be closer to 3 percent in the third quarter and 2.8 percent in the fourth.

The Labor Department said yesterday that job losses from Katrina rose by another 60,000 last week to 279,000. Last week's Katrina-related increase compared with 108,000 two weeks ago. Overall jobless claims declined to 356,000 last week, down from a two-year high of 435,000 the previous week.

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