Disaster! US Economy Lost 33000 Jobs in September as Hurricanes Hit Hard


And despite the loss of jobs in September, the more accurate alternative measure of labor utilization, what the Bureau of Labor Statistics calls its U-6 rate, fell to 8.3 percent, the lowest rate since November 2007. Total employment dropped by 33,000 workers, the first decline since 2010.

The US has been experiencing one of the longest stretches of job creation in its history, with the economy adding a monthly average of more than 170,000 over the past year.

The unemployment rate, which is calculated differently, declined to 4.2 percent in September, from 4.4 percent the previous month.

But a survey of USA households showed that employment grew by a 906,000 in September, helping push down the jobless rate to the lowest level since February 2001.

Economists had expected the addition of 80,000 jobs last month, but that was before the effects of Harvey and Irma were known. They rose 5.6 percent (annualized) and are up 2.9 percent year over year. While the average workweek was unchanged for the month across the board, average hourly earnings overall increased by 12 cents to $26.55.

"We know that there have been sectors and localities faring better than the norm, but [the September jobs report] suggests that wage growth is spreading, finally", he added.

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There was a significant impact on the data from hurricanes Harvey and Irma with a notable dip in employment numbers for the month due to storm damage.

As a result, the drop in the jobless rate is a sign the job market improved outside hurricane-hit areas.

The 4.2% unemployment rate was down from 4.4% in August. In a typical September, around 30,000 workers fall into that category; this year, that number was 1.5 million. That survey counted people as employed even if they were temporarily off work because of the storms. The labor force participation rate, at 63.1 percent, changed little over the month and has shown little movement over the year.

"While the monthly labor market report typically draws a high level of attention and scrutiny, we think less weight will be place on this month's payroll data as the recent hurricanes have potential to significantly distort the data", Charlie Ripley, senior investment strategist for Allianz Investment Management, an investment advisory firm, wrote in a note on Thursday. But wages could look good and go up a bit because lower-wage hourly workers usually don't get paid if they don't work, while higher-income salaried workers do. That calculation would make Harvey the second-worst USA natural disaster, after Hurricane Katrina in 2005. Economist Jared Bernstein also agrees that this month's numbers are largely due to the impact of Irma and Harvey and that the jobs market remains essentially solid.

The payroll survey does not include the US Caribbean territory of Puerto Rico, which was devastated last month by Hurricane Maria.