Jobless claims soar near 7-year high (David Goldman)

First economic report since financial meltdown shows initial unemployment claims rose by 7%, boosted by Hurricanes Gustav and Ike.

NEW YORK (CNNMoney.com) -- In the first economic reading from the period since the Wall Street crisis erupted, a government report Thursday showed initial unemployment claims rose last week much more than expected.

{xtypo_quote_right} The unemployment rate surged to 6.1% last month, a nearly five-year high and up from 5.7% in July. In the last recession, unemployment reached a high of 6.3%. "Without a doubt, we'll blow right past that," Vitner said. {/xtypo_quote_right} 

According to a study by the Department of Labor, initial filings for state jobless benefits increased by a seasonally adjusted 32,000 to 493,000 in the third week of September. It was the highest number of weekly claims since Sept. 29, 2001, when unemployment soared in the wake of the Sept. 11 terrorist attacks.

The consensus estimate of economists surveyed by Briefing.com was 450,000.

"The labor market is very weak," said Mark Vitner, an economist for Wachovia. "Layoffs have ticked up for the last two months, and there has been a slowdown in hiring, so we haven't been able to absorb new entrants into the workforce."

more

Read More: CNN Money