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U.S. jobless claims drop
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October 11, 2001: 9:17 a.m. ET
New unemployment benefit claims fall, coming in lower than expected.
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NEW YORK (CNNmoney) - New claims for unemployment benefits in the United States fell last week, the government said Thursday, to a far lower level than economists expected, as job cuts from last month's terrorist attacks may not yet be affecting the U.S. economy.
In its report, the Labor Department said new claims for state jobless benefits fell to 468,000 in the week ended Oct. 6 from a revised 535,000 the prior week. Economists surveyed by Briefing.com expected jobless claims of 510,000.
Still, the Labor Department said much of the decline was due in part to a seasonal adjustment, and the data was only beginning to reflect the full impact of the Sept. 11 terror attacks that destroyed the World Trade Center and damaged the Pentagon.
"The initial wave of layoffs in those industries most directly affected by the terrorist attacks has passed. However, there is another wave rolling to shore," said Steven Wood, economist with FinancialOxygen. "This second wave will be from the subsequent economic dislocations caused by the Sept. 11 events and be much more diffused through the economy."
The weekly jobless claims data typically are volatile. The four-week moving average, which smoothes out fluctuations in the weekly data, rose to 463,000 from a revised 455,000 the prior week.
Continuing claims for workers who have received at least a week of benefits rose to 3.48 million for the week ended Sept. 29, the latest data available, from a revised 3.81 million the previous week.
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U.S. jobless claims drop
CNNfn's Kathleen Hays takes a closer look at U.S. jobless claims.
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U.S. stock prices rose on encouraging corporate news, while Treasury bond prices fell.
Click here for CNNmoney.com's economic calendar
The number of claims has grown since the attacks, especially in the airline, travel and tourism industries, which announced thousands of job cuts, citing a steep dropoff in business.
The rate of unemployment in the United States held at 4.9 percent in September, though the number of job cuts rose alarmingly. Most economists expect the unemployment rate to rise well above 5.0 percent in the coming months.
"Even as the pace of layoffs has ebbed, no new hiring is taking place, so continuing claims will rise even further and surpass their peak in the last recession," Wood said. "Labor market deterioration is continuing with no end in sight."
Most economists expect the impact of the attacks -- and subsequent job cuts -- on consumer confidence will push the already weak U.S. economy into recession. To keep consumers spending, the Federal Reserve has cut its target for short-term interest rates nine times this year, twice in the month after the attacks. 
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