Looking behind the numbers of the September jobs report
- Author: Rita Burton Oct 07, 2017,
Oct 07, 2017, 0:13
Friday's official data from the Bureau of Labor Statistics confirmed what market watchers had forecast: Back-to-back storms during the month of September meant economists were anticipating - at best - low double digit job gains, with the most optimistic pegging the latest jobs figure at 90,000.
Despite the loss of jobs, the unemployment rate dropped to 4.2% from 4.4% - an indication the September numbers were not a harbinger of bigger problems.
The headline unemployment rate edged down to 4.2 percent.
But a survey of US households showed that employment grew by a 906,000 in September, helping push down the jobless rate to the lowest level since February 2001. In the last 12 months, the industry expanded by an average of 24,000 jobs per month. The Dow, S&P 500 and Nasdaq have all soared this year and are near record highs.
"There's going to be a huge residual impact for months, maybe years afterward", said Christine Short, vice president of media and public relations at Estimize, a financial estimates group, in an interview with The Washington Post. September was the first employment report to register the effects of hurricanes Harvey and Irma.
As a result, the drop in the jobless rate is a sign the job market improved outside hurricane-hit areas.More news: Congress misses deadline to reauthorize CHIP
Hourly workers who couldn't work and missed a paycheck would have been counted as not working, thereby lowering September's job total.
All those people fleeing south Florida to escape Hurricane Irma was bound to depress the number of Americans who were at work in September.
Hiring could even get a boost from a temporary increase in the number of people employed to help clean up after the recent spate of hurricanes.
The decline is despite the unemployment rate falling to 4.2 per cent, a 16-year low. Summaries from July and August showed impressive growth in the residential construction sector, giving economists a glimmer of hope that an inventory increase was on the way, but Hurricanes Harvey and Irma stifled that growth. The labor force rose a huge 575,000 and the labor force participation rate by 0.2 percentage points.
The storms did not affect all industries or workers equally. For the year, we've seen a total of 1,379,000 new jobs created since January for a monthly average of +153,000 jobs per month, which is well below the level where we've seen this average in some time. Low-wage, hourly workers in other industries may also have been disproportionately affected by the storm. Maria, which hammered Puerto Rico and the U.S. Virgin Islands, could cost $45 billion to $95 billion, though that is a preliminary estimate.