Good news: In September 2017, the U.S. jobless rate dropped to 4.2 percent, the lowest it’s been since 2001.
Bad news: The U.S. lost 33,000 jobs in the same month, despite the fact that economists had been expecting an increase of 90,000 jobs.
How can both of these things be true? The answer: Hurricanes Harvey and Irma.
“The numbers were certainly blown around a lot by the storms,” Carl Tannenbaum, Chief Economist for Northern Trust, told the New York Times. “The interruptions created in the hurricane regions were seen in leisure and hospitality especially, which had a huge decline.”
How big? The leisure and hospitality industry lost 111,000 jobs from August to September. This loss was eased somewhat by gains in education and health services, professional and financial services, transportation and warehousing, construction, and government.
The average hourly wage grew by 0.45 percent, for a year-over-year gain of 2.9 percent.
Tannenbaum said that the jump in wage growth and decrease in jobless numbers are transient. Because of the hurricanes, many low-wage workers were displaced from their jobs, so the overall wage average appeared better than it probably was. He also advised that the household survey, on which the jobless rate is based, may be distorted as well.
“As winds calm, my guess is the employment figures will stabilize,” Tannenbaum said.
On the other hand, some economists are predicting that the storms will create an uptick in jobs in the coming months, as homes and other buildings are repaired or rebuilt, and Americans buy items—including big-ticket items like cars—to replace things that were lost in the hurricanes and flooding.
It looks like jobs are already being created. The insurance industry added almost 11,000 jobs as companies hired claims adjusters to assess damage in the storm-affected areas. Building supply stores were the strongest segment of the retail sector, adding 5,300 jobs.
Hurricane Maria, which destroyed Puerto Rico and the U.S. Virgin Islands, didn’t affect the September job numbers, as the storm hit after the Labor Department had completed its September surveys. Additionally, the national job numbers don’t include Puerto Rico and the U.S. Virgin Islands—the Labor Department does track hiring and job losses there, though.
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