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CNN Live At Daybreak

Unemployment Rate Jumps to 5.4 Percent

Aired November 02, 2001 - 08:37   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MILES O'BRIEN, CNN ANCHOR: Kathleen Hays joins us to talk numbers.

I read an interesting article yesterday. It said that the seasonal workers for the post office, the applications is going through the roof, despite all the anthrax stuff. That's very interesting, and a reflection perhaps of what's going on in the economy.

KATHLEEN HAYS, CNN CORRESPONDENT: And despite that people don't get benefits if they are these kind of part-time, temporary-type workers, absolutely, and we reflected in the numbers, Miles, because we saw in the Labor Department that the economy lost 415,000 jobs, travel agencies, manufacturers, hotels, retailers, you know, surprise, the unemployment jumped to 5.4 percent from 4.9 percent, and this is much worse than the economy watchers on wall street were expecting. it's the biggest one month jump in unemployment in 21 years. It takes it back to level of unemployment that we were at in December of '96. So the economy definitely seems to be going in reverse right now.

O'BRIEN: All right. As if we needed more indications of that, there perhaps is some linkage here. You don't have to be a purveyor of the black science to understand if people are laid off, they're probably spending less; consumer spending driving the economy for so long, not where it was.

That number we got yesterday on September, consumer spending, very broad number not, too. It's not just like grocery stores and shoes. It's things like going to the doctor, footing your kids tuition bills, that sort of thing, down 1.8 percent in September. That was the biggest one-month drop since about 1983, and again, people filing claims for unemployment benefits. That's been steadily rising, Miles. What's been interesting lately is that the number of people staying unemployed, the people who they call in the continued claims pool, is at its highest level since about 1983. So what's interesting is a year ago, when people were getting laid off, economists say, we're getting jobs pretty quickly. The problem now is the economy has slowed down, and so they are staying unemployed longer, ergo the people you mentioned at outset looking for the temporary jobs at the post office.

O'BRIEN: Creates a cycle there, doesn't it?

HAYS: Absolutely. O'BRIEN: And finally, a subset of consumer spending, retail expenditures, which I guess is, in many cases, that can be the most extraneous of expenditures, the first to go, if you will.

HAYS: The Retail traffic down at stores and malls for the 26th week in a row, down something like 6.8 percent, almost 7 percent compared with a year ago, and you know what's alarming about this, and you can say that had a lot to do with the attacks on September 11th. However, this rise in unemployment claims, the rise in unemployment rates, started even before the September 11th attacks, and we got a very important number yesterday on the manufacturing sector, which showed that the economy was maybe starting and manufacturing to stabilize in September and October, well guess what, things really fell apart. That's one of the worse things about these attacks; they're not just having a political and social impact; it's the economic impact as well, but all this continues to reverberate through the economy.

Everybody's put everything on hold, and it has a direct impact on people's lives.

O'BRIEN: Any good news?

HAYS: Yes, it's Friday, it's the weekend, and we've been -- let me just say this, we've been through tough times as a country and an economy before, tougher times than these. The good news is it's a cycle; it goes down, but it comes back up.

O'BRIEN: Thank you. I appreciate that. Kathleen Hays giving us a nice bit of Friday words to take away.

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