Latest snapshot of American Economy
THE EMPLOYMENT SITUATION — SEPTEMBER 2017
The unemployment rate declined to 4.2% in September, and total nonfarm payroll employment changed little (-33,000), the average hourly wage grew by 0.45 percent, for a year-over-year gain of 2.9%, about 1.47m people were unable to work due to bad weather, most since Jan. 1996, the U.S. Bureau of Labor Statistics reported today.
According to the Nytimes.com,
The hurricanes that roared through Florida, Texas and neighboring states knocked down September’s national payroll totals. But whatever damage the storms caused, Wall Street analysts do not expect it to significantly undermine the labor market over the long term.
“The numbers were certainly blown around a lot by the storms,” said Carl Tannenbaum, chief economist for Northern Trust. “The interruptions created in the hurricane regions were seen in leisure and hospitality especially, which had a huge decline.”
Mr. Tannenbaum warned that the surprising jump in wage growth and the lowering of the jobless rate were aberrations. Because many low-wage workers were temporarily displaced, he said, the overall wage average appeared better than it probably was. The household survey, the basis for the jobless rate, was probably distorted as well, he said.
“As winds calm, my guess is the employment figures will stabilize,” he said.As for the reaction of the Federal Reserve, which has been closely monitoring the employment report, Mr. Tannenbaum said “the Fed is looking past” this month’s report.
Using Hurricane Katrina in August 2005 as a benchmark, Jim O’Sullivan, chief United States economist at High Frequency Economics, said he expected payroll gains to bounce back by the end of the year. “That was pretty much a two-month story at the time,” he said. Payroll gains had averaged 249,000 in the six months before Katrina. After New Orleans found itself underwater, employment gains averaged 76,000 over the next couple of months before rebounding to 341,000 in November 2005.
(Although Hurricane Maria also devastated Puerto Rico in September, the survey of employers that the Bureau of Labor Statistics uses to calculate monthly payroll gains does not include the island.)
Revised figures for July and August showed that a total of 38,000 fewer jobs were created in those two months than previously reported. Although some analysts had hoped to see those figures revised upward, summer is not generally considered the best time to gauge the labor market’s strength because it coincides with a gap in the school calendar.
Despite the discouraging payroll totals for September, Mr. Tannenbaum said, “The American job market is still performing awfully well considering we’re now in the ninth year of an economic expansion.”