US jobs take a hit yet unemployment rate drops after hurricanes
The damage from Hurricanes Harvey and Irma produced the first monthly decline in U.S. jobs in seven years, with a reported loss of 33,000 in September.
Numbers released Friday from the Labor Department reflected a drop of 105,000 positions in restaurant and bar jobs, a refection of the fallout in Florida’s tourism industry after Irma.
Economists had predicted nonfarm payrolls would increase by 90,000 jobs last month.
Despite the loss of jobs, the unemployment rate dropped to 4.2% from 4.4% — an indication the September numbers were not a harbinger of bigger problems. The 4.2% figure was the lowest since February 2001.
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“The labor market remains in good shape,” said Gus Faucher, chief economist at PNC Financial. “The job losses were due to disruptions from hurricanes, not underlying weakness in the economy.”
The drop in the unemployment rate comes from a different method of determining the numbers. People are still considered employed even if they missed work and were unpaid as a result.
But for the job numbers, hourly employees in the hurricane-battered region who were unable to work and missed a paycheck were counted without a job.
Some experts predict the hurricanes that pounded Texas and Florida will actually boost the economy, with businesses reopening as construction companies kick into high gear with rebuilding and repair work.
In the 87 counties designated as disaster areas in the two states, more than 11 million people are employed — nearly 8% of nation’s workforce.
Harvey inflicted as much as $87 billion in economic losses, while the cost of Irma could run as high as $83 billion, according to the economic consulting firm Moody's