US pay­rolls shrink for first time in 7 years

Cecil Whig - - OBITUARIES & REGIONAL - By JIM PUZZANGHERA Los An­ge­les Times

WASH­ING­TON — Hur­ri­canes Har­vey and Irma wal­loped the la­bor mar­ket last month, caus­ing the na­tion to lose jobs for the first time in seven years, the La­bor De­part­ment said Fri­day.

To­tal non­farm em­ploy­ment de­clined by a net 33,000 jobs in Septem­ber com­pared with an up­wardly re­vised gain of 169,000 the pre­vi­ous month. The La­bor De­part­ment said 1.5 mil­lion work­ers — the most in 20 years — were not at their jobs dur­ing the sur­vey week last month be­cause of bad weather.

Restau­rants and bars took the big­gest hit. To­tal em­ploy­ment in Septem­ber de­clined by 105,000 “as many work­ers were off pay­rolls due to the re­cent hur­ri­canes,” the La­bor De­part­ment said.

The sec­tor had av­er­aged job growth of 24,000 over the pre­vi­ous 12 months.

“We’ve very con­fi­dent those jobs are com­ing back,” Gary Cohn, the top White House eco­nomic ad­vi­sor, told Fox Busi­ness Net­work.

An­a­lysts had ex­pected the ma­jor hur­ri­canes that dev­as­tated large parts of Texas and Florida would sig­nif­i­cantly re­duce job growth in Septem­ber, but the de­cline was much big­ger than ex­pected.

“The first thing that comes to mind here is the scene in ‘The Wizard of Oz,’ where we hear the line, ‘Pay no at­ten­tion to the man be­hind the cur­tain,’” said Mark Ham­rick, se­nior eco­nomic an­a­lyst at fi­nan­cial in­for­ma­tion web­site

“Be­cause of the im­pacts from hur­ri­canes and flood­ing, the de­cline re­ported in Septem­ber pay­rolls doesn’t carry weight this time around,” he said.

Although much of the re­port will be dis­counted be­cause of the tem­po­rary weather ef­fects, there were some good signs.

The un­em­ploy­ment rate, which is cal­cu­lated dif­fer­ently, de­clined to 4.2 per­cent in Septem­ber, from 4.4 per­cent the pre­vi­ous month. That was the low­est level since 2001.

And av­er­age hourly earn­ings jumped 12 cents in Septem­ber to $26.55. That was the big­gest in­crease since 2007. For the 12 months that ended Sept. 30, wages were up 2.9 per­cent, well above the low in­fla­tion rate.

“Th­ese are re­ally great num­bers,” Cohn said of the wage growth. “It just shows Pres­i­dent Trump’s eco­nomic agenda is re­ally work­ing.”

But the un­usu­ally sharp wage growth was prob­a­bly a tem­po­rary boost re­lated to the hur­ri­cane, said Gus Faucher, chief econ­o­mist at PNC Fi­nan­cial Ser­vices Group. With so many lower-wage restau­rant and bar work­ers out of the cal­cu­la­tion, av­er­age earn­ings got an ar­ti­fi­cial bump up, he said.

“My guess is that was skewed,” Faucher said.

Econ­o­mists ex­pect the job mar­ket to re­bound from the hur­ri­cane dam­age in com­ing months as work­ers get back to their jobs and re­build­ing be­gins.

“We should get a boost over the months ahead be­cause you’re go­ing to have re­con­struc­tion ef­forts from in­sur­ance pay­ments and fed­eral aid,” Faucher said. “We’re go­ing to make up for it late 2017 and early 2018.”

Fed­eral Re­serve Chair Janet Yellen warned on Sept. 20 that “the hur­ri­canes se­verely dis­rupted the la­bor mar­ket in the af­fected ar­eas” and that the na­tion’s em­ploy­ment lev­els last month might be “sub­stan­tially af­fected.”

Eco­nomic growth in the third quar­ter of the year also would be “held down by the se­vere dis­rup­tions” caused by the hur­ri­canes but likely will bounce back, Yellen said at a news con­fer­ence.

“Based on past ex­pe­ri­ence, th­ese ef­fects are un­likely to ma­te­ri­ally al­ter the course of the na­tional econ­omy beyond the next cou­ple of quar­ters,” she said.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.