September lost 33,000 jobs; dip first since 2010

Analysts blame hurricanes; jobless rate declines to 4.2%

WASHINGTON — The U.S. economy lost 33,000 jobs in the aftermath of Hurricanes Harvey and Irma last month, the first decline since September 2010. The unemployment rate declined slightly to 4.2 percent, the lowest since February 2001.

Analysts had been expecting job growth to slump in September after the onetwo punch from the hurricanes. This was worse than predicted: The decline in job growth ended a historic 83-month stretch of expansion, the longest such streak since the Bureau of Labor Statistics began the survey in the 1930s.

But economists expect the numbers to rebound in coming months and the economy to continue to grow. Wages are also starting to improve at a noticeable pace. Average hourly wages rose 12 cents last month to $26.55, up 2.9 percent from a year ago.

The government’s monthly jobs report, released Friday morning, offers the first glimpse at how workers and companies are faring in the aftermath of the storms, which slammed Texas and Florida.

“This really does look like what happened following Hurricane Katrina 12 years ago, where there were two very soft employment numbers followed by a reassertion of the underlying trend in subsequent months,” said Joe Brusuelas, chief economist at RSM US LLP, which provides audit, tax and consulting services for companies. “This is nothing to worry about.”

More significant, economists say, is the increase of 906,000 jobs in the survey of U.S. households, which is

used to calculate the unemployment rate. Brusuelas said it was evidence of a “red hot labor market.”

U.S. Labor Secretary Alexander Acosta said in a statement that the report “reflects the resilience of the American economy.”

The 33,000 loss gleaned from the survey of employers reflects the decline in the number of paychecks issued during the survey period. But 906,000 more Americans are actually employed.

“The difference in these two numbers is that more Americans are employed, yet many missed a paycheck in September,” Acosta said.

The higher-than-usual wage increase reflects a loss of 105,000 positions in the leisure and hospitality sector, particularly in food services and drinking places, after the hurricanes — jobs that typically pay the lowest wages.

“If you have a lot of missing people in leisure and hospitality, which are the lowest wage workers, that pulls up the average,” said Andrew Chamberlain, chief economist for Glassdoor.

Other industries experienced gains. Transportation and warehousing added 22,000 jobs, likely resulting from the continued growth of online retailers, Chamberlain said. Health care, which has been steadily adding jobs as the baby boomers age, added 23,000 jobs.

Despite ominous warning signs about the economy in the report, Chamberlain said, “I don’t expect this to be the start of a downturn. This really reflects the tragic damage from Hurricanes Harvey and Irma, but the labor market is fundamentally healthy.”

Puerto Rico job losses were not included in the Bureau of

Labor Statistics report.

Economists had estimated the nation would add about 75,000 jobs last month, landing in the five-figure range for the first time in half a year. They expected the unemployment rate to hold steady at 4.4 percent and for wages to inch upward.

The two hurricanes, which made landfall in late August and September, took a toll on job creation — although analysts were mixed on whether the effects would be permanent.

“There’s going to be a huge residual impact for months, maybe years afterward,” said Christine Short, vice president of media and public relations at Estimize, a financial estimates group. “The hurricanes put tens of thousands of people out of work.”

The number of Americans who filed for unemployment benefits hit a two-year high at 298,000 in the first week of September.

Robert Frick, corporate economist for Navy Federal Credit Union, predicted the devastation from the storms won’t drag down the broader economy.

Researchers expect October’s numbers to reflect a rebound, thanks in part to the rising demand for construction workers, plumbers and electricians to repair hurricane damage.

The storms will make it harder for analysts to take an accurate reading of the country’s economic temperature through the rest of the year, since it’s tough to untangle short-term effects from other factors.