Sept. 8 (Bloomberg) -- The number of Americans filing first- time claims for jobless benefits fell to 319,000 last week, as people thrown out of work by Hurricane Katrina weren't able to apply for benefits.

Claims dropped by 1,000 for the week ending Sept. 3 from the prior week's 320,000, the Labor Department said in Washington. The hurricane hampered efforts by jobless people to file claims in Louisiana and Mississippi, a Labor Department spokesman said. About 10,000 disaster-related claims came from neighboring states and from partial reports in affected states, the spokesman said.

Hurricane Katrina ripped into the U.S. Gulf Coast on Aug. 29, leaving a wake of destruction through New Orleans and other coastal cities that may cost the economy 400,000 lost jobs this year, according to the Congressional Budget Office. The storm caused hundreds of deaths, left thousands homeless and destroyed hundreds of workplaces, while crippling government services such as employment offices.

``People were unable to make claims because of the hurricane,'' said David Sloan, chief U.S. market economist at 4Cast.com in New York, before the report. ``The labor market will certainly take a short-term hit in the aftermath of the hurricane; only if gasoline prices remain higher will the economy take a sustained hit outside of the affected regions.''

Economists forecast claims would fall to 315,000, the median of 36 estimates in a Bloomberg News survey. Estimates ranged from 275,000 to as many as 375,000.

Four-Week Average

The four-week average, a less volatile measure of claims, rose to 318,500 from 316,500, for the period ended Aug. 27, compared with 338,750 for the same period last year, when the economy added the most jobs since 1999.

Jobless claims of about 325,000 to 350,000 a week suggest employers are creating about 150,000 to 200,000 jobs a month, according to Mike Englund, chief U.S. economist at Action Economics LLC in Boulder, Colorado. Jobless claims typically fall as hiring grows.

The Labor Department spokesman said he expects claims to be revised higher in coming weeks as more flood victims are able to file.

``Certainly, in the short term, the regional devastation is very significant,'' Labor Secretary Elaine Chao said in a television interview yesterday. Still, she said construction spending should fuel a subsequent boom in job creation.

``New Orleans, for example, is going to see one of the biggest construction booms that they have ever seen,'' Chao said.

August Payrolls

Katrina struck at the end of the month, so it didn't affect August payrolls, which showed an increase of 169,000 jobs and a drop in the unemployment rate to 4.9 percent, the lowest in four years, the Labor Department said on Sept. 2. Hurricane-related job losses will begin to show up in coming weeks and job creation may be slowed in the short term.

Mary Jones, 40, said her husband is out looking for a job in Jackson, Mississippi, while she looks for food stamps and housing for herself, their two children, 18 and 21, her mother and mother- in-law, sister and niece. The family has been in Jackson since leaving their home in Marrero, west of New Orleans, ahead of Hurricane Katrina.

``How could anyone collect unemployment from Louisiana -- or at least New Orleans -- these days?'' she asked. ``We don't think we'll ever live there again. And the local government's impossible to get in touch with for anything.''

Wal-Mart Stores Inc., the world's largest retailer, said the storm and flooding closed 126 of its locations in Louisiana, Mississippi and Alabama and that about 34,000 workers were displaced by the hurricane. Wal-Mart is offering displaced workers jobs at other U.S. stores.

Oil Prices

Also dragging on growth, crude oil prices topped $70 a barrel last week as the hurricane shut down operations in the Gulf of Mexico, which provides 30 percent of U.S. production.

The number of people continuing to collect state jobless benefits decreased to 2.593 million from 2.598 million the week before, the Labor Department said.

The insured employment rate, which tends to track the U.S. jobless rate, was unchanged at 2 percent. The Labor Department said 31 states and territories reported fewer claims, while 22 had more. These data are reported with a one-week lag.

Economic Growth

The hurricane struck as economists have been forecasting economic growth would accelerate to a 4.1 percent annual pace in the third quarter from 3.3 percent in the second quarter. Goldman, Sachs & Co. yesterday cut its forecast for economic growth in the third quarter to an annual pace of 3.5 percent from a previous 5 percent forecast.

U.S. services industries, which represent the largest part of the economy, expanded for a 29th straight month in August, the Institute for Supply Management said on Sept. 6. The institute's measure of financial services, retail trade and other non- manufacturing services rose to its highest level this year.

Consumer spending rose 1 percent for a second month in July, matching June's as the biggest gain since May 2004. Consumers have financed some of their spending by tapping home equity in a real- estate market where home prices are near record levels.

New home sales unexpectedly rose to a record pace in July, as mortgage rates below 6 percent and steady employment growth continued to boost housing. Existing home sales fell from the previous month's record.

Hiring

Fort Lauderdale, Florida-based BankAtlantic Bancorp Inc. is among companies that are hiring, said Chief Executive Officer Alan Levan in a Sept. 2 interview.

``We're opening new stores and our existing stores are growing at a very rapid rate,'' he said. ``We're hiring at every level of the organization.''

Other companies, such as Ford Motor Co. are trimming payrolls to boost competitiveness. The second-largest U.S. automaker, will fire about 400 managers as part of its plan to cut 2,750 salaried workers by the end of the year.

To contact the reporter on this story: Bob Willis in Washington bwillis@bloomberg.net

Last Updated: September 8, 2005 08:30 EDT