Sept. 29 (Bloomberg) -- The number of Americans filing first- time claims for jobless benefits last week fell 79,000, a sign that many workers idled by Hurricane Katrina completed their applications for benefits after the disaster.

Claims fell to 356,000 in the week ended Sept. 24 from a revised 435,000 the prior week, the Labor Department said in Washington. About 60,000 claims last week came from people who lost their jobs because of Katrina, down from 108,000 the week before, a department spokesman said.

Claims surged after Hurricane Katrina struck the Gulf Coast on Aug. 29, destroying or closing hundreds of businesses. Even with the effects of Katrina and, more recently, Hurricane Rita, claims figures nationwide suggest the economy this year may generate about as many jobs as last year, when it added 2.2 million, the most since 1999, economists say.

``This suggests the bulk of the Katrina distortion is behind us,'' said Rick MacDonald, research director at Action Economics LLC in Los Angeles, before the report.

Economists expected claims to total 418,000 last week, according to the median of 38 forecasts in a Bloomberg News survey. Estimates ranged from 350,000 to 500,000. Claims were first reported at 432,000 the previous week.

The four-week moving average of claims, a less volatile measure, rose to 385,500 from 377,000 the week before.

Katrina, which left more than 1,000 dead in its wake, may cost the economy 400,000 jobs and as much as one percentage point of growth in the second half of the year, the Congressional Budget Office said earlier this month.

Continuing Claims

The number of people continuing to collect state jobless benefits increased to 2.802 million the week ended Sept. 17 from 2.658 million the week before. The four-week average rose to 2.652 million from 2.601 million.

The insured employment rate, which tends to track the U.S. jobless rate, rose to 2.2 percent from 2.1 percent. Thirty-five states reported an increase in claims while 18 reported a decline. Data on continuing claims, the insured employment rate and states' reporting is given with a one-week lag.

Hurricane Rita, which prompted the evacuation of the Galveston-Houston region in Texas before it struck on Sept. 23, may affect claims in subsequent weeks, said Chris Rupkey, senior financial economist at Bank of Tokyo-Mitsubishi Ltd. in New York. Energy prices may remain high because Rita shut down oil refineries near the Louisiana-Texas border that may not reopen for a month or more, he said.

Refineries near Port Arthur, Texas, and Lake Charles, Louisiana, ``got hammered, and that's where the real damage is,'' said Chuck Dunlap, president of Pasadena Refining System Inc. in Pasadena, Texas, on Sept. 27. ``The damage done there, you're talking weeks to get back up, or longer.''

Katrina's Effects

All told, Katrina accounted for 279,000 claims since it struck at the end of August, a department spokesman said. He said claims figures would continue to be revised in coming weeks.

Hurricane Katrina may cause payrolls to fall by 168,000 in September, the first decline since May 2003, after rising by 169,000 the previous month, according to a Bloomberg survey before the Oct. 7 employment report. Payrolls generally fall as jobless claims rise and vice versa.

``Even with the effects of Hurricane Katrina, the economy will create close to the 2.2 million jobs generated in 2004,'' Rupkey said. ``Employment is a lagging indicator and a lot of firms had plans to make new hires well before Hurricane Katrina.''

Economists at investment banks including Goldman Sachs Group Inc. and Lehman Brothers Inc. lowered economic growth forecasts after the storm, particularly because of rising energy prices from idled oil and refinery operations. The U.S. economy will grow at a 3.6 percent annual rate from July through September instead of the 4.1 percent forecasters predicted a month ago, according to a Bloomberg survey.

Monthly Jobs Report

The average retail price for all grades of gasoline in the U.S. jumped to a record $3.12 a gallon in the week ended Sept. 5, according to Energy Department data. The price was $2.85 a gallon as of Sept. 26.

Excluding unusual events such as the storms, weekly initial jobless claims of about 320,000 to 340,000 translate into monthly job growth of about 150,000 to 200,000, MacDonald said. He expects payrolls in September to fall by 75,000 because of the storms.

Federal and state relief workers fanned out after Katrina to register hurricane survivors and evacuees for jobless and other benefits once immediate needs for shelter, food and medicines were met.

The Mississippi Department of Employment Security sent a caravan of mobile computer labs, support vehicles and 11 motor homes to the Gulf Coast on Sept. 11 to set up temporary offices and housing at seven locations, said Liz Barnett, spokeswoman for department. ``All of our coastal offices were either damaged or destroyed,'' she said.

Between Sept. 4 and Sept. 26, the Mississippi Department of Employment Security processed 59,671 jobless claims, about four- fifths of them related to the hurricane, said Barnett.

Home Depot

Atlanta-based Home Depot Inc., the country's largest home improvement retailer, was among the companies that reopened stores in areas affected by Katrina.

``Within 72 hours we had most of our stores up and operating within the New Orleans area,'' said Carl Liebert, executive vice president of Home Depot Inc. in an interview from Atlanta on Sept. 23.

Still, many companies nationwide, including No. 3 carrier Delta Air Lines Inc., continue to fire workers to increase competitiveness.

Delta, which is also based in Atlanta, said on Sept. 22 it will eliminate as many as 9,000 jobs, or 17 percent of its payroll, and reduce employee and executive pay in the first extensive plan explaining how the Atlanta-based company expects to emerge from bankruptcy.

``Our transformation will be sweeping and fast-paced,'' Chief Executive Gerald Grinstein said in the statement. The company will be a ``smaller, more cost-efficient airline'' producing profits in just over two years, he said.

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

Last Updated: September 29, 2005 08:29 EDT