Sandy leaves a wake of jobless as unemployment increases, especially in the northeast

Hurricane Sandy is getting blamed for the rise in unemployment claims as people seeking unemployment benefits up to a seasonally adjusted 439,000 last week, the highest level in 18 months.

The Labor Department said Thursday that weekly applications increased by 78,000 mostly because a large number of applications were filed in states damaged by the storm. People can claim unemployment benefits if their workplaces close and they don’t get paid.

Sal Guatieri, an economist at BMO Capital Markets, said that a similar jump in applications occurred after Hurricane Katrina in 2005.

“We should see a full retracement of this increase in coming weeks,” he said. Applications were declining before the storm, he added, “though levels are consistent with moderate, rather than strong, job growth.”

The four-week average of applications, a less volatile number, increased to 383,750.

Retail sales data on Wednesday pointed to a softening in U.S. consumer spending early in the fourth quarter. Overall retail sales fell as Sandy slammed the brakes on automobile purchases last month.

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