Unemployment down to 42 wages rise 5
Staggering from the impact of hurricanes that walloped Texas, Florida and neighboring states, the economy lost 33,000 jobs in September, the first monthly decline in employment in seven years, the government reported on Friday.
But economists discounted the discouraging report, describing it as a blip in a job market that was fundamentally strong.
Some of the good news released by the Labor Department — a drop in the jobless rate to 4.2 percent and a year-over-year gain in wage growth of 2.9 percent — may also have been skewed by weather disruptions.
“The numbers were certainly blown around a lot by the storms,” said Carl Tannenbaum, chief economist for Northern Trust. For that reason, he said, the Federal Reserve , which has been scrutinizing the employment report for signs of inflation, will probably look past this report. “As winds calm,” he said, “my guess is employment figures will stabilize.”
That pattern held true for Bruce Gropper, who runs Right at Home, a home-care franchise in Palm Beach, Fla.
“We put our hiring on hold” because of the weather, Mr. Gropper said, adding that many of the 50 to 75 caregivers who work for him and would typically have been in the field were unable or unavailable to work during a two-week period. “Now, things are back to normal.”
It was the same in Texas. “There’s a lot of manufacturing jobs in Beaumont, Corpus Christi, Houston, all of which suffered damage,” noted Ray Perryman, president of the Perryman Group, an economic research and analysis firm based in Waco, Tex. “Some of these plants were shut down for an extended period of time, and that would have gotten into the September survey.”
One upside may be a surge in hiring in subsequent months. Using Hurricane Katrina in August 2005 as a benchmark, Jim O’Sullivan, chief United States economist at High Frequency Economics, said he expected payrolls to bounce back by the end of the year.
“There’s no question there were huge hurricane effects,” he said. Food and drinking establishments alone lost 105,000 jobs last month, and the Bureau of Labor Statistics reported that the number of people who said they were not working because of bad weather jumped by 1.5 million .
Mr. O’Sullivan and several economists agreed that the labor market was still pushing ahead — no matter how unevenly — in what is now the ninth year of an economic expansion. “The other data we’ve been seeing this week don’t show any signs of a weaker trend,” Mr. O’Sullivan said. “If you take out Texas and Florida, there’s been no increase in jobless claims over the past five weeks.”
The stock market’s reaction to the news was mildly negative. The Standard & Poor’s 500-stock index declined slightly from record levels after eight straight days of gains.
President Trump called attention this week to the economy’s successes, writing on Twitter on Thursday, “Stock Market hits an ALL-TIME high! Unemployment lowest in 16 years!” Last week, Mr. Trump said that the Republicans’ proposed tax cuts would provide further “ rocket fuel for our economy .”
Many workers have been waiting to see concrete evidence of economic progress in their paychecks. Although the Census Bureau last month reported a jump in annual incomes across a wide spectrum, households with incomes below the median remain worse off than they were in 2000.
The hefty growth in average wages reported on Friday was probably exaggerated, because many low-wage workers were temporarily displaced by the storms, bumping up the overall average.
At least a portion of the 0.5 percent average hourly wage growth last month, though, is likely to stick. There is plenty of evidence that broad swaths of the labor market are tightening. Target said last month that it would increase its base hourly pay by $1, to $11 — higher than or equal to the minimum wage in every state.
Amy Glaser, senior vice president of Adecco Staffing, said that employers she worked with were raising wages and reaching into less-common pools of potential employees like retirees, stay-at-home moms and people with disabilities.