The numbers: The economy “lost” 33,000 jobs in September, marking the first decline since 2010 as U.S. began to dig itself out from the Great Recession. Yet the decline was entirely due to widespread workplace disruptions caused by hurricanes Irma and Harvey
The unemployment rate, meanwhile, fell to 4.2% from 4.4% and hit the lowest level since December 2000. The jobless rate was not affected by the storms, the government said.
Wages rose 0.5%, or 12 cents, to $26.55 an hour, likely reflecting a hurricane-induced bump. Over the past 12 months hourly pay increased by 2.9%, up from 2.7% in the prior month and matching a post-recession high.
The government raised its estimate of new jobs created in August to 169,000 from 156,000. July’s gain was reduced to 138,000 from 189,000.
What happened: Hiring and employment in September were stunted by hurricanes Harvey and Irma. The storms disrupted major economic centers in Texas and Florida, where as many as 1.5 million people were temporarily unable to get to work. That’s the most in 20 years.
The industry hurt the most was the restaurant business. Employment fell by a whopping 105,000.
The absence in the latest employment report of so many waiters and cooks, who tend to be lower paid employees, likely inflated wage growth in September, the government indicated. If they were included the growth in pay would have been smaller.
Job gains in mid to late summer, meanwhile, were somewhat softer than the government originally reported, but still plenty enough to keep pushing the unemployment rate lower.
The big picture: Throw out the hurricane-distorted September jobs report. The current economic expansion is more than eight years old and shows little sign of slowing. Hiring is all but certain to bounce back in October and erase the decline in September.
Finding a job is easier now than it’s been in years. Job opening are at a record high, and many companies have adopted new strategies to attract workers amid a growing shortage of people with the skills they need.
The tightness in the labor market is reflected by the unemployment rate — it fell in September to the lowest level since December 2000. More than 900,000 people found employment last month, according to a separate household survey.
What they are saying?: “This single-month drop in payrolls should be temporary, doesn’t appear to be indicative of a broader economic slowdown, and will likely reverse next month,” said Jim Baird, chief investment office at Plante Moran Financial Advisors.
“The Fed and the markets will just ignore this report,” said Paul Ashworth of Capital Economics. “If past-storms, particularly Katrina, are any guide, employment will rebound markedly over the next few months.”
Market reaction: The Dow Jones Industrial Average
and the S&P 500 index
fell slightly in Friday trades. The dollar
and bond yields rose, indicating traders received the news positively.