U.S. economy shed jobs in August amid hurricanes


U.S. employment data showed that 33,000 jobs were lost during the month of September as Hurricanes Harvey and Irma made landfall, causing severe damage and loss of life in Texas and Florida and surrounding areas.

And, since jobs data is collected during the week that contains the 12th of the month, September figures captured the tail end of Hurricane Irma as well as the extended impacts of Harvey.

The food services industry lost 105,000 jobs, largely through layoffs associated with the hurricanes.

Economists had expected the addition of 80,000 jobs last month, but that was before the effects of Harvey and Irma were known.

"The labor market remains in good shape", said Gus Faucher, chief economist at PNC Financial. "We're going to make up for it late 2017 and early 2018". So, it's clear that job growth so far during the Trump Administration has slowed from past years. They could have been skewed, however, by the fact that many low-wage employees stayed away from work after the hurricanes.

That was despite a two tenths of a percentage point increase in the participation rate to 63.1%, as the number of people employed surged by 906,000.

The underemployment rate, which captures both those that are unemployment and folks who are working part-time but would prefer full-time employment, fell in September to 8.3%. The total nonfarm employment drop of 33,000 comes from BLS's Establishment Survey (which only includes employees paid during the survey period, which ended September 12). The result was that higher-paid workers disproportionately boosted the wage figure. That suggests that pay could be picking up, even excluding the storms, and encouraging more people to look for work.

In September, the pool of unemployed individuals was at 6.8 million. The areas hit by the storms employ 11 million Americans, and many of those jobs were temporarily halted due to the storms. If it did, Friday's decline would have been significantly higher. However, real wages - the buying power of workers' earnings with inflation taken into account - have declined 7.5 percent since 2006.

On Wednesday, a survey of services firms - covering restaurants, construction companies, retail stores, banks and others - found that they expanded in September at their fastest monthly pace since 2005.

"The storms caused large-scale evacuations and severe damage to many homes and businesses", BLS analysts noted.