Here’s the bad news: In addition to the damages caused by Hurricanes Harvey and Irma in Texas and Florida, the destructive storms also caused damaged to the country’s jobs situation, which fell by 33,000 in September.
Here’s the good news: The Bureau of Labor Statistics reported on Friday that the nation’s unemployment rate fell to a 16-year low of 4.2 percent.
Here’s even better news: The BLS reported that average hourly earnings were up by 12 cents on the month to $26.55, equating to a 2.9 percent gain for the year. That’s well above the 2 percent target the Federal Reserve sets for healthy inflation growth, meaning that the central bank is more likely to approve another interest rate hike at its December meeting.
Solely due to the two hurricanes, the jobs loss was the first monthly decline in seven years, during which the economy was still pulling out of the Great Recession.
Economists surveyed by Reuters expected payroll growth of 90,000 in September after approximately 169,000 jobs were added in August. They also expected the unemployment rate to remain at 4.4 percent. But they were wrong on both accounts. The unemployment rate declined even as the labor-force participation rate rose to 63.1 percent, its highest level all year and the best reading since March 2014.
“The lousy returns from the September jobs report will make little impression on observers, who essentially gave the labor market a free pass due to the impact of Hurricanes Harvey and Irma,” remarked Curt Long, chief economist at the National Association of Federally Insured Credit Unions. He noted that the wage gains may be misrepresented, because most of the jobs lost were in low-wage positions, due to restaurants in the hard-hit regions being forced to close.
More positive news included the fact that the number of discouraged workers and those working part-time for economic reasons also fell, from 8.6 percent to 8.3 percent, reaching its lowest reading since June 2007.
Job gains for the month came from health care, at 23,000; transportation and warehousing with 22,000; and professional and business services, which added 13,000.
Wall Street-related finance positions grew by a net 10,000, thanks to an increase of 11,000 for insurance carriers and related activities, showing one of the benefits of the storm. Credit-related services, on the other hand, lost 7,000 positions.
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