U.S. payrolls decline, reflect disruption from hurricanes
Sheetal Sukhija - Saturday 7th October, 2017
Number of workers on U.S. payrolls declined last month
The drop was recorded for the first time since 2010
The hurricanes had a net effect of reducing non-farm payrolls in September
WASHINGTON, U.S. - In September, the number of workers on U.S. payrolls declined for the first time since 2010.
Labor Department figures released on Friday showed that the payrolls decline reflected major disruptions from hurricanes Harvey and Irma.
Figures also revealed that the jobless rate fell to a new 16-year-low while wage gains accelerated.
According to the Labor department, payrolls fell 33k after 169k advance, revisions subtracted combined 38k in July-August.
Further, unemployment rate, derived from a separate Labor Department survey of households, dropped to 4.2 percent from 4.4 percent - recording lowest since February 2001.
Meanwhile, average hourly earnings rose by 0.5 percent m/m after 0.2 percent rise; up 2.9 percent y/y.
About 1.47 million people were unable to work due to bad weather, most since January 1996.
The Labor Department said in a special note on Friday that the hurricanes had a “net effect” of reducing non-farm payrolls in September.
However, there was “no discernible effect” on the national unemployment rate.
According to a statement from Bureau of Labor Statistics acting commissioner William Wiatrowski, restaurants and bars -- an industry where most workers only get paid if they show up to work -- had a 105,000 drop in payrolls.
According to analysts, the numbers reflect Harvey’s impact on Texas in late August, and Irma’s fallout in Florida in September.
They warned that the economy may be volatile for several months as the weather effects wash out and rebuilding picks up.
While they warned that it is hard to measure the exact impact of severe weather on national employment data - the Labor Department said that federally-designated disaster counties in Florida and Texas accounted for 7.7 percent of U.S. employment in March.
The number of Americans who didn’t report to work because of bad weather comes from the Labor Department’s survey of households.
Analysts pointed out that the survey still counts a worker as employed even if they missed that entire week’s work for weather-related reasons.
Gus Faucher, chief economist at PNC Financial Services Group Inc. in Pittsburgh said, “I don’t think this is indicative of problems in the labor market -- it’s because of the hurricanes.”
Excluding effects of the storms, “the economy is in decent shape, the labor market continues to improve, and we’ll bounce back to job growth in the final three months of 2017.”
Faucher said that of the jump in average hourly earnings, he’s “discounting that somewhat” because of the drop in employment at restaurants, a “low-paying industry.”
Adding, “My guess is that’s probably more of a compositional mix than a surge in wage growth, so I wouldn’t read too much into it.”
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