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Job Creation Declines In September In Report Likely Impacted By Hurricanes

07 October 2017
Job Creation Declines In September In Report Likely Impacted By Hurricanes

In September, the USA economy saw its first monthly loss of jobs in seven years - partly due to Hurricanes Harvey Irma - government statistics showed Friday.

That drop came even as the unemployment rate fell to a 16-year low of 4.2 percent, the Bureau of Labor Statistics reported Friday... Bars and restaurants lost 105,000 jobs, for example.

Hurricanes Harvey, Irma and Maria slammed the USA economy in September, leading to the first net job losses since 2010, the Labor Department said on Friday. The unemployment rate, measured from a separate survey, nevertheless fell to 4.2 percent, a rate not seen since February 2001-lower than the lowest rate reached before the Great Recession.

Other industries added jobs, including healthcare (+23,000 jobs), transportation and warehousing (+22,000 jobs), business and professional services (+13,000 jobs) and financial activities (+10,000 jobs).

The job losses were so substantial that it caused the number of jobs across the entire USA economy to shrink by 33,000 last month. The manufacturing sector shed 1,000 jobs after averaging gains of 14,000 new jobs each month since November 2016.

"We weren't able to do our normal hiring spree that we usually do going into the fall", Harmon said. For one, there's more slack in the job market than the unemployment rate reveals.

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.

Also the number of working age Americans not participating in the labor force shrank by 368,000 to 94.42 million.

Workers' wages jumped last month, another figure that may have been affected by the storms. But last month, the closely watched labor force participation rate rose to 63.1 percent, its highest level since March 2014. However, real wages - the buying power of workers' earnings with inflation taken into account - have declined 7.5 percent since 2006.

Employment in other major industries, including mining, construction, wholesale trade, retail trade, information, and government, showed little change over the month. For both surveys, national estimates do not include Puerto Rico or the U.S. Virgin Islands. With the global supply glut already showing signs of draining from OPEC measures, etc., we might expect oil prices to spike in the near-term, depending on the overall damage this new storm may cause.