Unemployment rate dips in US, but could rise post-Katrina |
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Sun, 04 Sep 2005 00:35
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WASHINGTON - The U.S Labor Department revealed that the rate of unemployment in the country had hit a four-year low of 4.9 percent as 169,000 jobs were added in August. Federal Reserve Chairman Alan Greenspan and his colleagues have been striving to assure Americans that the hiring scenario was very bright and these figures confirmed those statements.
However, in the aftermath of the devastating Hurricane Katrina, the employment picture of the future looks a little bit murky at the moment. Richard Yamarone of Argus Research was one of the first to voice concerns about the economic fallout due to Katrina, "The economy is motoring along, and we are indeed creating more than a decent amount of jobs. But there are a number of hurdles that lie in our path of prosperity -- record energy prices and the economic consequences of Hurricane Katrina," he said.
His argument makes sense because the Labor Department's figures were tabulated before Katrina vented her fury on the Gulf Coast and swept away everything in her path including vital oil and gas refineries. Hundreds of thousands of people who were employed in New Orleans as office staff or in other private establishments face weeks of unemployment as the area struggles back to normalcy. It is not a confined area that has been affected by Katrina; the ripples of destructions are likely to leave a lasting imprint on the U.S economy.
JP Morgan economist Bruce Kasman said as much, "As destructive as past storms have been, they didn't leave an imprint on the U.S. business cycle," he noted saying that Katrina was going to be the exception to this rule and had already affected the economy as gasoline prices have skyrocketed. Sophia Koropeckyj, of the consulting firm Economy.com, said that predicting unemployment levels in the aftermath of the hurricane was very difficult and that it could go out of hand.
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