The number of Americans filing new claims for jobless aid shot up by 71,000 last week as workers displaced by Hurricane Katrina sought to join the benefit rolls.
The rise in first-time claims for state unemployment aid, the biggest jump in nearly 10 years, brought initial filings in the week ended September 10th to 398,000, the highest level in two years.
The Labor Department estimated that 68,000 of the increase were related to Katrina.
However, it cautioned that it was unable to process the huge surge in claims that were filed as state workers went into evacuee shelters to log applications.
"Due to the unprecedented volume of claims filed in the affected areas and due to the unconventional methods used in filing, the numbers that are reported do not truly reflect the number of claims filed," a department analyst said.
The increase in initial claims was the largest for any week since January 1996, when blizzards blanketed the US east Coast. The big jump pushed a four-week moving average of claims up by 19,750 to 340,750, the highest level in nearly a year.
The number of workers who continued to file for benefits after an initial week of aid rose by 20,000 to 2.59 million. But that number is certain to swell as workers displaced by Katrina join the rolls.
States provide unemployment benefits for up to 26 weeks, but lawmakers are already mulling a federal program to extend aid for an additional 13 weeks in the wake of the storm.
Congress passed similar extensions amid the jobless recovery from the 2001 recession.