USA loses 33000 jobs in September, due to hurricanes Harvey and Irma

Saturday, 07 Oct, 2017

Ahead of Friday's jobs report the Bureau of Labor Statistics said some 11.2 million workers lived in the affected areas, about 7.7% of the USA workforce. And the economy had added new jobs for 83 straight months.

The headline unemployment rate edged down to 4.2 percent. These figures have surprised analysts, who were counting on 75,000 new jobs and an unemployment rate stable at 4.4 %.

Note that last month wage growth was above trend, as average hourly wages rose 0.5 percent over the month and 2.9 percent over the past year (the yearly trend has been around 2.5 percent). The proportion of adults with jobs rose to 60.4 percent, the highest since January 2009. "But despite the distortions, average hourly earnings went down and unemployment went down".

Hurricanes Harvey and Irma are being blamed for the first monthly job loss in six years. 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.

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"Hurricanes Harvey and Irma hurt the job market in September", said Mark Zandi, chief economist at Moody's, which helps compile the ADP report. There was no discernible effect on the national unemployment rate. The total nonfarm employment drop of 33,000 comes from BLS's Establishment Survey (which only includes employees paid during the survey period, which ended September 12).

If a worker doesn't receive any pay for the survey pay period, which is in the middle of the month, the Labor Department considers that person unemployed.

Excluding the hurricanes' effect on the monthly hiring data, several indicators suggest that the economy and the job market remain on firm footing. "We're going to make up for it late 2017 and early 2018". That rate dropped to 8.3 percent in September, the lowest U6 rate in over 10 years. The civilian labor force grew by 575,000, and the number of Americans not in the labor force fell by 368,000. But the government said that figure was artificially inflated by the loss of so many lower-paid workers in hurricane-hit areas.

The storms did not affect all industries or workers equally. That's equal to about 7.7 percent of the nation's workforce. Maria, which hammered Puerto Rico and the U.S. Virgin Islands, could cost $45 billion to $95 billion, though that is a preliminary estimate.