Economy

US Employment Unexpectedly Edges Lower In September

US Employment Unexpectedly Edges Lower In September”

USA total nonfarm payroll employment declined by 33,000 in September, largely due to hurricanes Harvey and Irma that hit the country, the Labor Department said Friday in a report.

It showed that the U.S. economy shed jobs for the first time since 2010, something the Bureau of Labor Statistics blamed on the damage caused by the hurricanes Irma and Harvey.

The Labor Department said yesterday that nonfarm payrolls decreased by 33,000 jobs last month amid a record drop in employment in the leisure and hospitality sector.

"History tells us hurricane-related job losses are likely to recover quickly and we expect above-trend [hiring] numbers by the end of the year", said James Ragan, director of individual investor group research at D.A. Davidson & Co. Yet hiring is widely expected to rebound in coming months as companies reopen and bring back workers and construction firms ramp up fix and renovation work.

The biggest hit to jobs came from a drop of 105,000 at restaurants and bars. But many businesses were still closed by the flooding that accompanied the storm when the Labor Department started to survey employers in the middle of September. Economists had expected the unemployment rate to hold at 4.4%. The report also showed a notable acceleration in the pace of wage growth, as average hourly employee earnings were up by 2.9% year-over-year in September compared to 2.5% in August.

That's a sign that the low unemployment rate is pulling more Americans off the sidelines and back into the job market. Still, the government said that figure was artificially inflated by the loss of so many lower-paid workers in hurricane-hit areas. Higher-paid workers likely disproportionately boosted the wage figure. That's equal to about 7.7 percent of the nation's workforce. And building supply stores was by far the strongest segment of retailing. That increase in purchases should soon lead automakers to step up production.

The government on Friday also revised up wage gains in August - before the hurricanes hit - to a 2.7 percent annual rate, from 2.5 percent.

Harvey caused about $76 billion to $87 billion in economic losses, according to Moody's Analytics, an economic consulting firm. Maria, which hammered Puerto Rico and the U.S. Virgin Islands, could cost $45 billion to $95 billion, though that is a preliminary estimate. That calculation would make Harvey the second-worst US natural disaster, after Hurricane Katrina in 2005.

"The storms caused large-scale evacuations and severe damage to many homes and businesses", he continued.

"Construction jobs, which did not change much in the latest month, will need to increase rapidly in order to relieve the housing shortage facing the country", he said.



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