Storm causes 25K in lost jobs

But experts say employment for Houston will bounce back

Houston shed nearly 25,000 jobs in the aftermath of Hurricane Harvey, which slammed into the Gulf Coast at the end of August and unleashed floodwaters that shut down, damaged or destroyed thousands of businesses and homes across the region, the U.S. Labor Department reported Friday.

Economists expect that most of the September job losses will be temporary as businesses complete repairs and reopen, and disaster aid from the federal government and insurance companies pour into the region to finance rebuilding. Bill Gilmer, director of the Institute of Regional Forecasting at the University of Houston, said he expects job growth to rebound in October and the Houston area to recover all the jobs lost in the storm by January.

“We won’t see any lasting impact,” he said.

It’s difficult to gauge how Harvey affected employment in the different industries that make up

the Houston economy because the Labor Department does not adjust sector data at the metropolitan level for seasonal variations. That means it’s unclear whether jobs were lost or gained in different sectors because of the storm or seasonal changes in employment. Overall metropolitan employment figures are seasonally adjusted.

But state statistics, which are seasonally adjusted, show where Harvey hit the hardest. Restaurants and hotels absorbed the biggest blow from the record-setting storm, cutting 23,400 jobs statewide last month. Retailers shed 6,500 positions.

A one-two punch

Hurricane Harvey arrived at a rough time for the restaurant industry, which was still recovering from an oil bust that forced energy companies to slash entertainment and travel budgets. Beyond the damage caused by the storm, the flooding affected spending habits of thousands of consumers, who are devoting large shares of their income to home repairs and don’t have money to go out to eat.

For example, DRINK Houston, a bar in Spring Branch, managed to reopen after Harvey but ultimately closed because sales decreased significantly. Holley’s Seafood Restaurant & Oyster Bar shut down for several weeks after Harvey, with plans to reopen. But earlier this month, the highend Midtown eatery said it would close permanently.

“We’re not right back on track just because the water dried up,” said Chris Tripoli, president of A’La Carte Consulting Group in Houston, which advises restaurants on business strategies.

Disaster’s two phases

Until Harvey, the local economy was on a fairly steady path to recovery. In August, Houston was adding jobs at an annualized rate of 1.6 percent, a gain of 46,600 jobs over the previous 12 months, according to the Labor Department. But that growth rate fell by a percentage point in September, to just 0.6 percent.

“We took a beating on our growth,” said Ron Borski, an economist with Gulf Coast Workforce Solutions.

Typically, disasters have two phases, said Gilmer. At first, people stay home. They don’t go out to eat, which hurts restaurants; they cancel medical appointments, which hurts the health care industry; and they work from home, so janitorial services at their offices are reduced.

In the second phase, however, Houston should see a mini-economic boom as the cleanup continues and rebuilding takes off, Gilmer said. Retail sales will jump as consumers buy carpet and wallboard, and construction jobs will increase as companies are hired to rebuild the thousands of flooded homes in Houston.

The state, meanwhile, added 4,100 construction jobs in September. Waste management and remediation companies — plenty busy as business and home owners cleared debris from flooded properties — added 5,500 jobs.

Overall, the state lost a net 7,300 jobs in September, but the unemployment rate slipped to 4 percent from 4.2 percent in August. The U.S. jobless rate was 4.2 percent in September.

In Houston, the unemployment rate was 5.2 percent, down from 5.7 percent in September 2016.

Southern Smoke, a chef-sponsored fund raiser for the National Multiple Sclerosis Society, is redirecting donations this year to benefit local restaurant workers who lost cars and homes during Hurricane Harvey. Lindsey Brown, a board member of Southern Smoke, said organizers expect to raise at least $500,000. Each worker is eligible to receive up to $10,000, said Brown, who has been distributing flyers to restaurants encouraging workers to apply.