Hurricane-Battered US Shed 33000 Jobs in September
- Author: Eleanor Harrison Oct 07, 2017,
Oct 07, 2017, 0:16
Payrolls for the month of September fell by 33,000 - the first decline since September 2010.
Economists expected the economy to add about 90,000 jobs last month.
Where the September employment situation report looked positive was in the 4.2% official unemployment rate. But economists have long said that the economy needs monthly job growth of over 300,000 to help restore employment to many who suffered during the 2008-2009 downturn. Over the prior 12 months, job growth in the industry had averaged 50,000 per month. The Dow, S&P 500 and Nasdaq have all soared this year and are near record highs. Job creation is likely to spring back next month, and perhaps be even stronger than usual, with so many people having gone back to work. Hurricane Sandy struck in October 2012, affecting the busy Northeast, including the NY metropolitan area, but the economy barely noticed, falling from 203,000 new jobs that September to 146,000 and 132,000 the next two months.
While Hurricane Maria has resulted in widespread unemployment in Puerto Rico, the Bureau of Labor Statistics does not include data from the island in its monthly reports. That calculation would make Harvey the second-worst US natural disaster, after Hurricane Katrina in 2005. For one, there's more slack in the job market than the unemployment rate reveals. Employees who weren't paid during the Labor Department's survey week (of September 12) were not counted as employed. In a typical September, around 30,000 workers fall into that category; this year, that number was 1.5 million.
Puerto Rico, the United States territory also devastated by the hurricanes, is not counted in the jobs report. The civilian labor force grew by 575,000, and the number of Americans not in the labor force fell by 368,000. "The job losses were due to disruptions from hurricanes, not underlying weakness in the economy". That is the highest level of annual wage growth in more than eight years, and it means some people are getting more in their paychecks.
Was there any good news? Yes. Also, the Fed's recent interest rate hikes show up in my analysis as slowing the wage growth of less-advantaged workers.
"We have to take everything with a note of caution given the likelihood of heavy distortions relating to hurricanes", said James Knightley, global economist at ING. That's true even if those employees return to work after the storm passes.