September was a rough month for the U.S. economy, an estimated 33,000 jobs were lost over the month many believing the aftermath of Hurricane Irma and Harvey were the cause for the sudden job lost. Payroll drops in September end a nearly 7-year streak of continuous in Job gains, but economists caution that the drop is likely representing the short-term consequences of bad weather, not a long-term shift in the job market. Wall Street economists had expected very modest employment gains of 80,000, according to Bloomberg.
William J. Wiatrowski released an official statement earlier stating that In September, a sharp employment decline in food services and drinking places and below-trend growth in some other industries likely reflected the impact of Hurricanes Irma and Harvey. The storms caused large-scale evacuations and severe damage to many homes and businesses. In the establishment survey, employees who are not paid for the pay period that includes the
12th of the month are not counted as employed. Many employees in areas affected by the hurricanes were likely off payrolls during the reference pay period for September. Employment is measured differently in the household survey; people with jobs are counted as employed even if they miss work for the entire survey reference week (the week including the
12th of the month), regardless of whether they are paid. In September 1.5 million workers had a job but were not at work for the entire reference week due to bad weather, the highest level for this series over the past 20 years. This series is highly sensitive to the timing of weather events and thus does not capture the immediate effect of all such events on the job market.
Many experts believe the current report on the U.S. economy is not a clear representation of how our economy is trending. Jim O’Sullivan, chief United States economist at High Frequency Economics, stated he expected payroll gains to bounce back by the end of the year. Payroll gains had averaged 249,000 in the six months before Hurricane Katrina. After New Orleans found itself underwater, employment gains averaged 76,000 over the next couple of months before rebounding to 341,000 in November 2005.
The U.S. economy is certainly a significant factor in our society, so it is never good news when mass job losses are reported, but all signs point to the U.S. economy still in good condition and we should have nothing to worry about in the near future.