Hurricane-Related Job Losses Jump

The number of people who have lost their jobs because of Hurricanes Katrina and Rita jumped to 438,000 last week as the economic shockwaves from the nation's costliest natural disaster continued to be felt six weeks after Katrina careened across the Gulf Coast.

The Labor Department reported that an additional 75,000 hurricane-related claims were filed last week out of a nationwide total of 389,000 new claims for unemployment benefits.

Government analysts said that Katrina, which hit near New Orleans on Aug. 29, was still accounting for more layoffs than Rita, which came ashore near the Texas-Louisiana border on Sept. 24.

The rise of 75,000 in hurricane-related unemployment benefit claims was up slightly from 74,000 such claims two weeks ago, the first week that claims from Rita showed up. The highest week for claims attributed to the hurricanes was the week ending Sept. 17, when claims from Katrina totaled 108,000.

Analysts said it is likely that hurricane-related claims have peaked but they said it was likely that they will remain a significant portion of total jobless claims for several more weeks, reflecting the widespread destruction that wiped out thousands of businesses along the Gulf Coast.

Meanwhile, officials have just begun to venture into the ravaged and overwhelmingly poor Ninth Ward, where water rose to rooftops after levees were breached.

And residents have been allowed back into the area over the past few days, CBS News correspondent Drew Levinson reports for The Early Show.

Levinson spoke with Troy Green, a resident of the Ninth Ward who has been wondering about the state of his home for six weeks — but hasn't been able to see it until now. But even after being allowed back, Green left his family where they had been staying in another part of the state, fearing they wouldn't be able to handle seeing the destruction.

The area is mostly abandoned, its schools still architecturally stunning but devastated. Scattered along the hallway on the second floor of Louis Armstrong Elementary are reminders of the poverty: dozens of pink applications for free lunch. The school's student body was 99 percent black and 95 percent received free or reduced-price lunches.

If environmental teams determine the school unsafe, it likely will be demolished.

"Would you put your kid in this school again?" asked Martin McFarland, managing director of Alvarez & Marsal, and an expert in real estate and construction.

Not only were the majority of schools failing, the district was in financial straits — more than $25 million in the red — prompting it to hire a financial management firm to help the troubled system.

But before Alvarez & Marsal could come to grips with the operational side of the district's 126 schools, Katrina hit and forced the firm to take on a new role: crisis management.

Company officials, now working with the Federal Emergency Management Agency, are doing school-by-school structural assessments. They're also working with the school board and national education groups about how to recraft the system.

But before a top-notch educational system can be realized, children who will fill these new, improved classrooms and hallways must return, something no one can promise.

"I would be surprised if they get 10,000 students this year," Jacobs said. "I'll be surprised if they end up with 25,000 next year. A tremendous amount of people are out of town where they're likely to find better housing, better schools and better jobs."

The government reported last Friday that the nation's jobless rate was pushed to 5.1 percent in September from a four-year low of 4.9 percent in August. Business payrolls fell for the first time in two years, a decline that was also attributed to the hurricanes.

The 389,000 new claims for jobless benefits that were filed last week represented a drop of 2,000 from the 391,000 claims filed two weeks ago. Analysts have been encouraged that the level of jobless claims in the rest of the country has remained steady, indicating that the overall economy has been able to weather so far the shocks from the hurricane and the resulting surge in energy prices as Gulf Coast production facilities were shut down.

The weekly jobless claims report showed that the biggest increase for the week ending Oct. 1 occurred in Texas, a rise of 17,931 that was attributed to the hurricanes. The layoffs occurred in construction, public administration and manufacturing.

Louisiana had the second largest increase in layoffs, a total of 8,580, a rise that was also attributed to the hurricanes. The breakdown for individual states lags behind the national data by one week.

The worsening of the country's trade deficit was driven by a record-high bill for petroleum imports. Analysts predicted further bad news in the months ahead, reflecting the surge in energy costs that occurred after Katrina and Rita shut down refineries and oil and natural gas platforms along the Gulf Coast. Crude oil prices briefly spiked above $70 per barrel right after Katrina hit.

Underscoring that point, the Labor Department said in a separate report that the price of imported goods rose by 2.3 percent in September. The gain, the biggest in 15 years, was driven by a 7.3 percent surge in petroleum prices. The cost of foreign oil is now at record levels, pushed up by big increases over the past four months.