Katrina triggers massive surge in jobless claims
WASHINGTON - Hurricane Katrina triggered the biggest one-week surge in jobless claims in nearly a decade and analysts warn that's likely just the beginning of the bad economic news ahead as the nation starts paying for the most expensive natural disaster in U.S. history.
Consumers, already feeling the pinch at the gas pump, should be braced for price hikes for various products and services. Everything from food to furniture to shoes could start becoming more expensive as retailers pass on higher shipping costs to consumers.
Gas prices were rising even before Katrina but they spiked immediately afterward because the storm caused widespread shutdowns of oil platforms, refineries and pipelines. Hundreds of thousands of people are out of work in the region and the rebuilding effort is expected to take years and cost hundreds of billions of dollars.
Other airlines struggling
DALLAS - Unlike two carriers that filed for bankruptcy this week, American Airlines, the nation's largest carrier, has already cut wages sharply, eked out a small profit and piled up more than $3 billion in cash.
Analysts say American and Continental Airlines Inc., the No. 5 carrier, are unlikely to follow rivals Delta Air Lines Inc. and Northwest Airlines Corp. into bankruptcy anytime soon. But American - which barely avoided bankruptcy two years ago - and Continental are also struggling with high fuel prices and big pension obligations.
If Delta and Northwest use the bankruptcy process to dump their pension obligations and cut employees' pay, it could force American and Continental to do the same, analysts say.
Newell Rubbermaid to cut overhead, 5,000 jobs
ATLANTA - Newell Rubbermaid Inc., maker of plastic products for the home and office, on Thursday announced a three-year plan to streamline manufacturing and cut overhead, including laying off 5,000 workers.
The maker of Sharpie pens and Rubbermaid trash cans said it plans to close one-third of its 80 factories worldwide.
The company expects to incur restructuring charges of $295 million to $340 million, beginning with $220 million to $250 million next year. When the plan is complete in 2008, Newell estimates annual savings of about $120 million.
The company currently has 31,000 employees worldwide.
- From wire reports