New claims for unemployment insurance grow; rate cut awaited

WASHINGTON -- New claims for state unemployment insurance rose last week as the nation's weakening economy continued to take its toll on workers.

The number of workers filing new applications for jobless benefits rose 21,000 to a seasonally adjusted 431,000 for the work week ending Sept. 8, the Labor Department reported Thursday. For the previous week, a revised 410,000 workers filed for jobless benefits.

The total number of laid-off workers drawing unemployment benefits continued to climb, hitting almost 3.35 million -- levels not seen in nearly a decade, since the country was struggling to emerge from the last recession.

Analysts say this week's terrorist attacks are certain to cascade into problems for the U.S. and world economies at a time when consumers, whose confidence was shaky at best with concerns about rising unemployment, were the main force keeping the economy afloat. The nation's unemployment rate topped 4.9 percent in August.

The nation's stock markets will resume trading Monday after a four-day delay because of the devastation caused in New York's financial district after two jetliners crashed into the twin towers of the World Trade Center. However, bond trading resumed Thursday.

Interest rate cuts

Many economists are predicting that the Federal Reserve will answer with further cuts in U.S. short-term interest rates, possibly before their next meeting Oct. 2. The Fed announced Thursday that it was making $50 billion available to stabilize U.S. branches of European banks.

In the jobless report, the last time initial claims were that high was July 7, when 449,000 workers filed for benefits.

For the work week ending Sept. 1, 31 states and territories reported increases in jobless claims and 22 reported decreases. The state data lag a week behind the national figures and are not seasonally adjusted.

States reporting increases were Michigan, up 3,829 with layoffs in the automobile industry; Indiana, up 1,713 with layoffs in the primary metals industry; Arkansas, up 1,634; Texas, up 1,304 with layoffs in primary and fabricated metals, apparel, non-electrical machinery and transportation equipment; Missouri, up 1,201 with layoffs in electrical machinery; North Dakota, up 1,121; South Carolina, up 1,069 with layoffs in textiles; and Pennsylvania, up 1,004 with layoffs in construction, primary metals, furniture, machinery and service.

States reporting decreases were New York, down 2,639; North Carolina, down 1,876; and Alabama, down 1,202.